Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Meridian suffers low SI wholesale prices in Dec 1/4

Meridian suffers low South Island wholesale prices in Dec quarter

By Pattrick Smellie

Feb. 1 (BusinessDesk) - Meridian Energy achieved barely half the average price for wholesale electricity as its Auckland-based competitor, MightyRiverPower, the state-owned power company's update for the December quarter shows.

The average price per Megawatt hour per customer for Meridian over the three months was $31.21 per Megawatt hour, while MRP said in its quarterly update earlier this week it had outperformed the market and achieved an average price of $66.25 per MWh.

Both state-owned generator-retailers are slated for partial privatisation, possibly both this year. The timing depends on the outcome of a Supreme Court hearing that wraps up in Wellington today, in which the New Zealand Maori Council is seeking to block the sales.

While both are large-scale hydro generators, Meridian's assets are in the South Island while MRP's are all on the Waikato River, fed by Lake Taupo.

During the period, South Island catchments were at times full to overflowing, while Taupo was never as full, suggesting some explanation for better prices from North Island hydro assets.

Meridian also suffered 20 days in the quarter when work on upgrading the high voltage direct current link across Cook Strait had caused "periods of high price separation between the North and South Islands."

Price separation is where the national wholesale market for electricity is broken in two by constraints on the link between the two islands. Completion of the $672 million Transpower upgrade been delayed twice. It is now expected to commission in late April.

The commentary confirms Meridian is one of the few participants in the wholesale electricity market pleased with an unexpectedly radical solution from the Electricity Authority to redistribute the costs of the national grid among users.

"Meridian is particularly pleased that the EA's analysis supports a change to pricing for the HVDC link."

The existing charging regime loads the whole cost of the north-south link on southern generators, even though northern generators get benefit from it.
In the same quarter a year earlier, Meridian's average price per MWh ran at $60.88.

Total customer numbers at 284,673 were steady, and retail churn is dropping at around 18 percent.

Meridian also confirmed it is considering the future of its A$500 million investment in the Macarthur wind farm in a joint venture in Victoria, Australia.

The bond-like structure of the arrangement could make it profitable for Meridian to exit while interest rates are low. However, "no decision is imminent," the company said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news