Mighty River may power into phones and finance

By Mark Reynolds


Mighty River Power, the state-owned enterprise that will own Mercury Energy and First Electric retail operations from April 1, is considering a move to sell other services.

The company said it was prepared to work with other energy retail companies in an effort to move into new markets. The firm also said it wanted to find out what its expanding customer base wanted from it, an exercise that might even lead to a linkup with a provider of phone or financial services.

Mighty River Power, formerly called Waikato SOE, would consider working with companies like TrustPower or TransAlta, the company's executives says. "We will be exploring all opportunities," said chief executive Doug Heffernan.

Mr Heffernan, formerly chief executive of Mercury's great rival in the Auckland region, Power New Zealand, said further deregulation of the industry from April 1 presented several options for power companies to form new partnerships and alliances.

Following Edison Mission's purchase of a controlling stake in Contact Energy, there will be six or seven main power retailers and generators in the market from April.

That includes the three companies formed from the split of ECNZ.

"We can't rule out working with one of the other retailers. We've given some thought to opportunities in that area," Mr Heffernan said.

Mighty River Power inherits the Hamilton-based generation assets of ECNZ, including nine power stations on the Waikato River.

It owns Mercury's 230,000 residential customers and 30,000 commercial customers , along with about 24,000 customers First Electric has secured.

Its total assets are worth more than $1 billion and staff number 450.
Mighty River Power will be the largest retail power company in the country after TransAlta and Contact, and the fourth largest generation company.

Mr Heffernan said: "Other industries have much more competitive retail strategies and have much more in-house capability to research their customer base effectively.

"We need to do that better and see what our customers are actually looking for from us."

That could stretch to working with any service provider, including phone or financial services companies.

Mighty River Power will keep its Mercury and First Electric brands, which cater to different markets.

"Mercury has strong brand value and we see no reason why that shouldn't go on," Mr Heffernan said.

"But some people are more receptive to changing markets than others and hence we will have different brands and different offers for customers," he said.

Mr Heffernan said there had been a lot of speculation paid for energy assets in recent months - including the price paid by ECNZ for the Mercury retailing business.