Mercury Energy Quarterly Operational Update
Mercury Energy Quarterly Operational Update Three Months Ended 30 September 2017
Continued Focus on Rewarding Loyalty
Mercury's focus on rewarding existing customers continued to produce below market churn. For the quarter ended 30 September 2017, Mercury's annualised trader churn for all brands of 7.9% was 1.6% below the market average of 9.5%, based on Electricity Authority data.
During the quarter an additional 28,000 customers were registered to enjoy AirpointsTM as Mercury continued to deliver on our customer promises to reward, inspire and make it easy. At 30 September, 147,000 customers (approximately 40% of Mercury brand) were registered with AirpointsTM.
The average energy price to customers was up (to $118.05/MWh) compared to the same period last year ($117.46/MWh). Consistent with the previous quarter, the VWAP of sales to business customers was down approximately $4/MWh.
Record Generation; Hydro Generation Forecast up
During the quarter, Mercury produced a number of records across our renewable generation fleet.
Total generation was a record for the quarter, up 313GWh to 2,258GWh. Hydro generation was up 266GWh to 1,522GWh, due to inflows into the Waikato catchment being the fourth highest on record. Geothermal generation was up 47GWh with 98.2% availability achieved across all stations due to the timing of planned outages.
Within the quarter, records for peak output were achieved for the Waikato Hydro Scheme and at the Kawerau geothermal station. A record for peak instantaneous output of 1,063MW was achieved for hydro generation with all 39 units simultaneously generating on the Waikato River and a new daily generation record was achieved at Kawerau. These records were accomplished due to the company's ongoing hydro refurbishment programme and focus across the company on operational excellence and innovation.
National storage was 66% of average at 30 June 2017 due to earlier dry conditions in the South Island. As a result, wholesale prices peaked in July and were $92.79/MWh (Otahuhu) and $95.92/MWh (Benmore) for the quarter. These prices were up $33.36/MWh and $48.62/MWh respectively on the prior year. Mercury was able to achieve record generation in the highest-priced quarter since Q3-FY2014 as a result of inflows into the Waikato catchment being uncorrelated to hydrological conditions in the South Island.
With high inflows into the Waikato catchment since August, Mercury has updated our FY2018 mid-point hydro generation forecast to 4,400GWh (up 250GWh on the forecast provided with the release of our FY2017 results and 400GWh above the long-term average).
Underlying Demand Growth
After adjusting for temperature, national demand was up 0.6% compared to the same quarter last year (or flat on an unadjusted basis). This increase in demand was attributable to growth in the urban (0.6%) and rural (0.2%) sectors, partially offset by a reduction in the industrial sector (-0.2%).