Call to increase power prices

Retail electricity prices need to rise to support more expensive new generation projects, Mighty River Power said at its annual meeting.
Chief executive Doug Heffernan said growth in electricity demand in the last three years had been well below the historic average of 2 per cent, with essentially no growth since the onset of the global financial crisis in autumn 2007.
During that time 5850GWh per annum has been added to the supply side, improving New Zealand's ability to cope with hydro and wind variability in electricity generation.
Due to soft demand conditions, many consented generation developments would now come to market much later than previously projected, Dr Heffernan said.
To recover costs over the life of the projects an upward retail price movement would be needed to support new investment, he said.
State-owned Mighty River Power is New Zealand's fourth largest electricity generator by capacity and third largest retailer by customer numbers. It is one of the 10 largest geothermal companies globally and through an international partner, GeoGlobal Energy, is investing in offshore geothermal developments.
Chairwoman Joan Withers said earnings before interest, tax, depreciation, amortisation and financial instruments of $327.8 million in the year to June 30, 2010, was within a forecast range, but was 27 per cent down on last year's record result. That was due to significantly reduced hydro volumes and lower wholesale prices and higher operating expenses due to increased power-station maintenance.
The lower than planned Ebitaf meant that the return on capital employed was below target at 8.2 per cent but the 9.7 per cent return on equity exceeded the target specified in the statement of corporate intent.
"Firstly, our generation assets were not as available for use as planned due to a higher number of forced outages," Ms Withers said.
"This was a result of the more stressful conditions due to the drought requiring us to run the plants harder than normal, which in turn created forced maintenance. We also experienced a well failure at Kawerau that had an impact here, however we are pleased to report that Kawerau will be restored to full capacity this month."
The company also said that additional allocation from the Waikato hydro system would transfer value from people and businesses of New Zealand as a whole to small number of irrigators.