Mighty River Power’s renewable generation lifts to 98%

27 April 2011

MIGHTY RIVER POWER – OPERATING INFORMATION
For the three months ended 31 March 2011

The new geothermal plant at Nga Awa Purua, along with improved hydrology driving higher output from the Company’s Waikato hydro assets, resulted in renewable generation making up 98% of Mighty River Power’s total volume of 1544GWh for the three months to 31 March 2011 (up from 87% in the prior comparable period). Reflecting the lower production from gas co-generation, the Company’s carbon emissions during the same period reduced by 30%.

GENERATION
Mighty River Power’s electricity generation volumes were up 6.3% (91GWh) on the same period in 2010. Geothermal accounted for 35% of production and hydro 63%.

Production from the new Nga Awa Purua plant drove geothermal volumes up 175GWh (48%) which, coupled with strong hydrology, contributed to reducing gas co-generation to just 2% of the total volume, substantially down on last year. Gas costs increased 4.6% to $8.48/PJ on the lower volumes.

In a period marked by high rainfall and flood events in the Waikato Region, hydro generation was up 7.3% (66GWh) on the prior comparable period. Due to hydro management activities throughout the entire river chain, undertaken in conjunction with the Waikato Regional Council as Flood Manager, Lake Taupo peaked at just 5cm over the upper operating level. These events resulted in the Taupo Gates operating at maximum for an extended period to maximise water outflow from Lake Taupo. Accordingly, not all water could be used at the downstream hydro stations resulting in spill past the stations equivalent to 134GWh (or 14%) of hydro generation for the quarter.

SALES
Despite a drop in customer numbers, residential sales volumes increased by 1% on the prior period reflecting the Company’s success in targeted acquisition and retention campaigns to increase the quality of the residential customer base. Total electricity market purchases fell 5.4% compared with the prior comparable period, primarily due to a loss of lower margin contracts in the commercial market as customers responded to the generally low spot prices of the past year.

Weighted average FPVV price increased to $106.44/MWh, up 5.6% on the prior comparable period, due to the introduction of the first stage of the Emissions Trading Scheme and an increase in energy prices in April 2010.

Mighty River Power’s active participation in the hedge market, along with the commencement of the Virtual Asset Swap (VAS) with Meridian Energy, which took effect on 1 January 2011, was reflected in much higher volumes of both buy and sell Contracts for Difference (CFD) compared with the same period in 2010.

Wholesale market pricing information for the quarter will be released by the Company once the Electricity Authority has announced its decision on the Undesirable Trading Situation claimed for events on 26 March 2011. Prices for that period are still provisional and the NZEM has not invoiced for trading periods on 26 March. A decision by the Authority is expected in early May.

ENDS

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