Quarterly Operational Update
Three months ended 30 June 2014
CUSTOMER ENERGY PRICE DOWN IN LINE WITH FORECAST
Mighty River Power’s average energy price for sales to customers in the quarter to 30 June 2014 was down 4% on the prior
comparable period (pcp), reflecting the highly competitive retail electricity market.
The average energy price achieved for sales in the quarter was down $4.59/MWh to $122.17/MWh. The lower pricing was
driven by competition in both the commercial and residential segments. The Company commitment to not increase headline
residential energy prices, the introduction of Mercury Energy’s additional 2% Prompt Payment Discount, and the effect of
absorbing increases in local lines and transmission charges in fixed-price customer contracts contributed to this
decline in energy prices. The energy price of $117.70 for the 12 months to 30 June represents an increase of 0.4% over
the past year, and was in line with Mighty River Power’s IPO forecast for the period of $118/MWh.
GEOTHERMAL AND HYDRO PUSH GENERATION UP 10%
A partial recovery of hydro conditions in the quarter saw hydro production up 78GWh (11%) on pcp and Lake Taupo storage
up 82GWh over the quarter. The lake level at 30 June was 65% of long run average (91GWh below average) and currently
sits at 83% of long run average (as at 22 July).
Geothermal was up 135GWh (25%) on pcp due to additional production from the Ngatamariki station (which was commissioned
in September 2013) and increased fuel availability lifting Kawerau output. Nga Awa Purua production remained stable at
the level expected until the rotor replacement (scheduled towards late CY2015). Less than expected fuel availability at
Ngatamariki has led the Company to bring forward drilling on a new production well which is currently underway. We
expect Ngatamariki to be back from its 72MW output currently to 82MW by the end of calendar year 2014.
The utilisation of gas-fired generation from the Southdown station was well down on previous periods with just 31GWh in
the quarter and a record low generation of 125GWh for the year ending 30 June. The Company is reviewing the role of
Southdown and options for the future of the plant.
REDUCED COMMERCIAL SALES COMMITMENTS, IMPROVING OUTCOMES IN WHOLESALE
Commercial volumes (from Fixed Price Variable Volume contracts and CFD contracts) fell on pcp as the Company actively
managed its sales book, to gain additional flexibility with hydro generation rather than using this generation capacity
to hedge low fixed-priced commercial sales. Residential electricity sales volumes were also slightly lower due to warmer
weather and reduced acquisition and retention activity in the South Island. The average price for generation during the
quarter was $71.67MWh, outperforming the market average and other large generators. The relative price paid for
purchases compared to the wholesale price the Company received for its generation (LWAP/GWAP), was flat on pcp despite
the additional base-load geothermal generation. The 12 month ratio (LWAP/GWAP) was below unity for the first time in
four years.
Mighty River Power will release its financial results for the 12 months ended 30 June 2014 on 20 August 2014.
Click here for the full report.
ENDS