Mighty River Power Quarterly Operational Update
Three months ended 30 June 2016
Quarterly Highlights
• Record geothermal generation for FY16, up 2% on the previous year
• Energy price down 4% in Q4, reflecting the renewal price of commercial contracts
• LWAP/GWAP of 1.03 for FY16 reflected low wholesale price volatility and locational price differences
Commentary
HIGHEST ANNUAL GEOTHERMAL PRODUCTION IN COMPANY HISTORY
Geothermal generation for FY16 was the Company’s highest ever at 2,830GWh (up 2% on FY15) due to availability of 95.5%
over the year and the impact of the turbine replacement at Nga Awa Purua. For the quarter, geothermal generation was
down slightly on pcp to 702GWh, due to maintenance activity at Ngatamariki.
Total hydro generation for FY16 was up 16% from FY15 to 3,866GWh – this however was below the annual average of 4,000GWh
due to inflows being 34th percentile for the year. During the quarter, national storage increased to 29% above average
at 30 June, which contributed towards flat wholesale prices.
The LWAP/GWAP ratio for the 12 months ended 30 June was 1.03, with lower wholesale price volatility impacting both
generation prices (GWAP) and purchase prices (LWAP). The relative difference between LWAP and GWAP is also impacted by
locational price differences which are not expected to return to historic levels due to recent thermal plant closures in
the upper North Island.
ENERGY PRICE DOWN; COMMERCIAL VOLUMES UP
A lift in overall sales volumes reflected higher commercial contracting activity as prices temporarily improved from
levels earlier in the year. However new sales contracts contributed to a fall in the average energy price to customers
by 4% to $117.58/MWh as these new commercial contracts replaced those that matured. As previously communicated, a large
proportion of these higher-priced contracts were signed between FY2011 and FY2013.
The Company’s focus on rewarding customer loyalty, with initiatives such as free electricity days (Good Energy Days),
contributed towards higher customer satisfaction scores compared to other major retailers. The average percentage of
Mercury customers rating as ‘highly satisfied’ over the last 12 months was 61%. Customer churn was favourably impacted
by the proportion of Mercury residential customers on fixed price contracts increasing to 42% at year-end (up from 35%
at the same time last year), as some customers took up the offer of a 2-year fixed-price offer in preference to an
increase in energy pricing.
NATIONAL DEMAND FLAT ON PCP; UP YEAR ON YEAR
When adjusted for warmer temperatures, national demand for electricity was flat (-0.1%) for the quarter compared with
pcp. Adjusted demand for the financial year was up 0.6% on FY15. This is the second consecutive financial year that
demand has increased.
Mighty River Power will release its financial results for the 12 months ended 30 June 2016 on 23 August 2016. The
analyst briefing will be held at 11am on the day – more details to come.
ENDS