State-owned power firms show strong results

By CHRIS DANIELS energy writer

With an industry shake-up looming, state-owned power companies have announced healthy profits for the last six months of last year.

Meridian, Genesis, Mighty River Power and the national grid owner Transpower all made profits, but the cold dry winter of the year before has cast its shadow over the results, making some comparisons difficult.

Revelations of profits earned by the companies come at a politically difficult time for the Government, which has been pressured to intervene in the electricity sector and halt the rise of wholesale power prices.

The standout firms were Meridian and Mighty River Power, both of which enjoyed a wet six months.

Mighty River's profits were boosted by a one-off $35.4 million gain from getting out of an "onerous power supply agreement" with Southdown Co-Generation.

Genesis, which owns the Huntly power station, saw its profit more than halve, despite revenue dropping only 6 per cent.

Transpower, which owns and maintains the national grid, had its profit halved for the six months, but revenue dropped only 5 per cent. This profit drop was put down to the one-off impact of a settlement with Meridian over transmission charges.

Meridian, New Zealand's biggest generator and owner of the Waitaki River hydro scheme, will pay the Crown $53.6 million in an interim dividend for the six months.

Big industry, business lobbyists and New Zealand's largest trade union last week called on the Government to do something about soaring wholesale electricity prices.

The Government on Monday said it was considering unspecified changes to the electricity market.

Contact Energy, the only large non state-owned power generator and retailer, said the uncertainty caused by this made investment in new generation less likely.