KEY POINTS:
Strong retail demand caused by a cold winter and low wholesale prices have helped the three state-owned electricity companies to a combined first half profit of almost a quarter of a billion dollars.
Mighty River and Genesis' net profit rose by 40 per cent and 26 per cent
respectively.
Meridian's bottom line - excluding the effect of the sale of its Australian Southern Hydro Business - was down 8 per cent.
The three companies' combined net profit rose 11 per cent to $239.1 million.
"Higher sales volumes over the winter months combined with good hydro production and reduced gas costs enabled us to record a very pleasing result," said Mighty River Power chairwoman Carole Durbin.
Mighty River's total operating revenue fell, mainly because of lower wholesale market prices. But that was offset by a decrease in retail energy purchase costs, a pattern also seen in the other two companies' results.
What the generator retailers lose by selling power on the wholesale market at lower prices, they more than recover from an increased margin on sales to retail customers.
Mighty River also said strong hydro inflows and flexible gas contracts enabled it to reduce production at its gas-fired Southdown plant, saving $10.6 million on its gas bill.
Genesis also said last year's cold winter had a significant effect on its financial performance.
Its increased profit of $60 million came largely from electricity sold on the wholesale market.
Revenue for the six months was down from $969 million to $945 million, as hydro inflows in the second quarter depressed wholesale electricity prices, but the company reduced its operating expenses.
The company generated high volumes of power at its big coal-fired Huntly power station while demand for electricity was at peak levels, burning 1.5 million tonnes of coal over the six-month period.
"However we are aware of the impact of coal-fired generation on the climate," said chief executive Murray Jackson.
"Our key strategy to reduce our dependence on coal has been to construct the 385MW combined cycle gas turbine at Huntly and plan for another similar plant north of Auckland in the Rodney district."
Once fully commissioned by winter this year, the Huntly e3p plant would able to offset between 1.6 and 1.9 million tonnes of carbon dioxide a year that would have been emitted by the less efficient coal-burning plant.
Meridian said its lower net profit of $104.5 million was mainly caused by an increase in depreciation expenses but the company had produced a strong operating performance reflecting positive conditions for hydro generation over the period and relatively low wholesale prices.
Chief executive Keith Turner said the company's net energy revenue of $345 million was up 8.5 per cent from the previous corresponding period.
Meridian said average weekly electricity demand over the half year was up 1.9 per cent on a year earlier, although this was somewhat offset by the lower wholesale prices.