Meridian Energy will watch first for closure of fossil fuel-fired power stations before making any decision on how it responds if Rio Tinto, majority owner of the Tiwai Point aluminium smelter, exercises its option to terminate its contract on July 1 next year, Meridian chief executive Mark Binns told shareholders.
The company's shares listed a year ago at $1, with 50c still be paid next May, and closed up 4c yesterday at $1.67.
At Meridian's first annual meeting since listing, Binns dwelt on two threats to the company from Australia - the potential closure of the Tiwai Point smelter and the review of the Australian federal Government's Renewable Energy Targets scheme, which underpins revenue generated by Meridian's substantial stable of Australian windfarms.
In the event of a negative decision, the company may need to reassess the carrying value of those assets on the Meridian balance sheet.
Binns told the meeting that if Meridian Energy received notice of termination from New Zealand Aluminium Smelters after July 1 next year, the company "will monitor the supply response from its thermal competitors very closely" as the consumer of about one-seventh of all electricity generated in New Zealand wound down production.
