Mighty River Power Quarterly Operational Update -End 30 sept

Quarterly Operational Update

Three months ended 30 September 2013

•          Baseload geothermal generation made up of 43% of electricity generation
•          Hydro generation down 34% - the lowest first quarter since the Company was formed in 1999
•          Flexible generation portfolio allowed the Company to receive a higher price for its generation than the market and its competitors

FLEXIBLE GENERATION PORTFOLIO COMPENSATES FOR LOW HYDRO CONDITIONS

Operating statistics for the quarter to 30 September 2013 reflect additional geothermal production from the new Ngatamariki station and active management of the Company’s portfolio – with increased net purchases from the wholesale electricity market to cover customer sales requirements, due to lower hydro production during the period.

The 82MW Ngatamariki station boosted total geothermal output to 691GWh and 43% of Mighty River Power’s total generation for the quarter. The overall generation volume of 1,621GWh was down 348GWh (or 18%) on the prior comparable period (pcp) due to low inflows into the Waikato River catchment (hydro generation down 34%) and the Company opting to buy additional volumes cheaply from the wholesale market – rather than using more expensive gas-fired generation. South Island hydro conditions, which have a much greater influence on national pricing, were above-average during this time and resulted in low prevailing wholesale prices during the period.

The Company achieved an improvement in the relative wholesale price paid for purchases compared with the wholesale price it earned for its generation (LWAP/GWAP), from 1.04 in the pcp to 0.97 for the three months to 30 September 2013. This reflects the best use of its flexible generation in a period of low inflows, in addition to recent improvements in the national transmission grid which have strengthened the competitive environment and reduced exposures to locational price risk.

RECORD LOW OUTPUT FOR WAIKATO DURING Q1; HYDRO STORAGE NOW ABOVE 100% OF AVERAGE

As a result of the Company’s management of the available water and flexible use of hydro and gas-fired generation, the weighted average wholesale electricity price achieved for generation was $64.37/MWh, similar to pcp and above the market prices received by our competitors for the period. Flexible gas-fired generation accounted for only 4% of total production and was down nearly 50% to 67GWh in line with the national trend of renewables displacing thermal plant. While hydro volumes for the quarter were the lowest for Q1 since the Company was formed in 1999, Lake Taupo storage is now at more than 100% of historical average after strong inflows from late September.

MAINTAINS POSITIVE SALES MARKET SHARE TREND 

Electricity sales volumes to customers were down 5% on the pcp, largely reflecting lower national demand and a drop-off in commercial volumes (down 8%) with the Company actively managing its sales book after achieving a very strong increase in advance of the commissioning of Ngatamariki. Over the past five years the Company has increased its market share from 17% to 19%. In the continuing highly competitive market in the quarter, Mighty River Power’s average FPVV sales price was $123.47/MWh across its multiple consumer brands and sales channels.

Mighty River Power will release its financial results for the six months ending 31 December 2013 on 26 February 2014.

Mighty_River_Power_Quarterly_Operational_Update_For_The_Three_months_ended_30_September_2013.pdf

ENDS

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