Two state power firms net $66m

WELLINGTON - Government coffers can look forward to a $140 million boost from two state-owned power companies.

Meridian Energy and Genesis posted maiden half-year profits totalling $66.3 million and together will pay $139.43 million in tax and dividends.

Meridian also unveiled spending plans, saying it was keen to buy the 75 per cent stake in TransAlta that Natural Gas Corporation has bid for. Competition watchdog the Commerce Commission will rule next week on NGC's bid to buy the stake in the country's largest power retailer from TransAlta Canada.

Meridian, the largest state-owned generator, posted a $50.7 million profit in the six months to December 31. During the half-year it paid the Crown $99.9 million in dividends and set aside $25.72 million in income tax.

The profit was $1.8 million ahead of budget and was a 6.4 per cent return on shareholders' funds, compared with a 5.29 per cent target.

Genesis posted a $15.6 million profit for the same period. It set aside $9.41 million for tax and declared a $4.4 million dividend to be paid next week.

Meridian and Genesis were formed on April 1, 1999, when the Electricity Corporation was split up. A third generator created in the split, Mighty River, has yet to post its result.

Meridian chief executive Keith Turner said the customer base had grown by 30,000 to 100,000. Some customers who switched suppliers had experienced problems with their bills, but extra resources had been put into ironing out that difficulty.

Meridian had reduced its exposure to volatility in electricity prices by using contracts, he said.

Genesis chief executive Murray Jackson said his company was on track to meet full-year forecasts. It would revise the value of assets before April 1 to reflect market value.

The company had overhauled its retail operation and rationalised its numerous tariffs.

- NZPA