Pansy Wong National Energy Spokesperson

18 March 2002

Power companies and Government set to grab more profits

Forecast profits for Government-owned power companies show that electricity consumers are set to be taken to the cleaners again, says National's Energy spokesperson Pansy Wong.

"Last year Meridian, Mighty River and Genesis made a record $200 million in profits for their owner, the Government. Figures contained in their Statement of Corporate Intent* show that these power companies intend to make even bigger margins for the next three years.

"Before 2001, the companies aimed for a Return on Equity of around 6%. Now Meridian and Mighty River are forecasting around 9% for the next three years. If last year was a record year due to drought, why don't they return to pre-2001 levels?"

Ms Wong says the Minister of State Owned Enterprises, Mark Burton, has a lot to answer for.

"The Minister's silence on the issue of electricity pricing is unacceptable. Does he understand what is happening to residential and business consumers, or is he just happy to take the profits and run?"

Ends

Inquiries: Pansy Wong 027 2222 208

*Profit level of Generators SOE

------------ Meridian------ Mighty River------Genesis

Year
2000 (actual)
Profit after tax 96.3m.------ 41.3m------56.6m
Return on Equity 5.7%-------- 6.5%------ 6.6%
Dividend------ 62.4m------4.4m

2001 (actual)
Profit after tax 125.1m------ 59.1m------59.9m

Return on Equity 7.6%------------ 8.6%------ 7.3%
Budget RoE------ 5.7%------------ 6.8%------ 4.0%
Dividend------ 181.5m------ 20.6m------14.7m

2002 (Forecast)
Profit after tax------124.5m------ 62.5m
Return on Equity------7.6%------------ 8.3%------4.0%
Dividend------------80.4m------ 43.8m------ ?

2003 (Forecast)
Profit after tax------ 141.6m------ 67.9m
Return on Equity------ 8.9%------------8.8%------2.6%
Dividend------------ 92.0m------ 47.6m------ ?

2004 (Forecast)
Profit after tax------150.0m------ 73.1m
Return on Equity------9.8%------ 9.2%------3.6%
Dividend------------97.5m------ 51.2m------ ?

Source: Statement of Corporate Intents

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