Darkness over as powerco in black

By CHRIS DANIELS energy writer

Power generator Trustpower has announced a healthy six-month profit of $23.1 million, showing a firm recovery from the dark days of winter 2001.

The unaudited result comes after a $12.2 million loss for the same period last year, when the company was forced to supply its retail customers with expensive power from the wholesale electricity market.

Prices soared on that market when low inflows into hydro storage lakes forced generators to ration their production.

Trustpower eventually made a full-year profit of just $1.3 million from revenue of just under $600 million.

ccairman Harold Titter, in a statement issued yesterday with the half-year results, said the turnaround to profit was the result of "more normal generating and trading conditions, a programme of tariff increases to better reflect the true costs of retailing electricity, and strong cost control".

Sales revenue of $325 million for the six months was down slightly from $357 million in the same period last year.

Titter said this decrease was caused by more customers now paying a tariff based on the wholesale spot price of electricity rather than a fixed tariff.

Money earned from these customers tended to fluctuate along with the spot price.

The board announced an interim dividend of 12.5c a share, doubled from the 6c paid last year.

Titter said Trustpower was continuing to pursue new-generation opportunities in New Zealand and Australia.

He said that while development of these could take some time, the expected premiums from "environmentally friendly renewable generation" could make it a worthwhile undertaking, "particularly as the respective governments are likely to provide extra benefits as their greenhouse gas policies unfold".

This would seem to count Trustpower out of the running for those companies interested in bidding for the NGC-owned Stratford power station, which is due to be sold by the end of this year.

Expressions of interest are being sought by NGC for this modern combined cycle gas-fired station and its small Cobb hydro station near Nelson.

NGC, 66 per cent owned by AGL, which also owns 14 per cent of Trustpower, wants indicative bids in November, with final bids submitted in December.

Prospective buyers also have been invited to register their interest in NGC's stakes in the Southdown Co-generation and Rotokawa geothermal power stations.

NGC chairman Greg Martin told shareholders at last week's annual meeting that there had been "a pleasing level of interest", including some from overseas.

The assets have been valued at $548 million.

State-owned power company Meridian, which owns the huge hydro-electric scheme on the Waitaki River and the Manapouri hydro station, is interested in bidding for the Stratford thermal station.

Having a gas-fired plant would allow Meridian to earn big money during years when the hydro lakes are low.