Meridian Energy is talking to potential customers who could fill the void left by the Tiwai Point aluminium smelter when it closes next year.
But the company still has an offer on the table with Tiwai's owner, New Zealand Aluminium Smelters (NZAS), to encourage a staged exit over the next four years.
It is also looking at possible mitigating measures, such as a giant battery near Wellington or in the upper North Island, to help deal with the extra power going on to the grid resulting from the closure next August of Tiwai, which uses about 13 per cent of the country's power.
Meridian earlier said its operating earnings - ebitdaf - rose 2 per cent to $854 million in the June year, driven by record generation and retail sales growth in New Zealand and Australia.
New Zealand's biggest power generator said its net profit dropped by 48 per cent to $176m, reflecting higher depreciation on previously revalued assets and changes to the value of financial instruments it uses to manage risk.
Meridian chief executive Neal Barclay said the company was in regular contact with Tiwai's controlling owner, Rio Tinto.
"We have got an offer on the table for a staged exit over four years and it is pretty compelling," he told the Herald.
It reflects the fact that over the next three or four years we will be spilling a lot of water down the river, so we might as well get some revenue from that generation," he said.
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But Barclay said the sticking point was NZAS's transmissions costs, which are outside Meridian's purview.
"They are part of the equation when you look at the delivered costs of energy," he said.
"We are not part of that conversation, but we know that they are trying to engage with the Government and (national grid operator) Transpower," he said.
Last-minute reprieves aside, Meridian is planning for an August 2021 exit by NZAS.
"We are talking to some really credible parties about other industries who want to set up in the South Island and take advantage of the renewable energy available," he said.
Meridian is also talking to the other big power generators in terms of how to manage the risks, post Tiwai.
Barclay said Meridian was also talking with Tesla about the possibility of a 100 megawatt battery in the North Island - at Haywards near Wellington, or Hamilton or Auckland - to help to increase the effective capacity of the HDVC link across Cook Strait.
Barclay said batteries can provide reserve power to the grid, thereby allowing more power to flow from the South Island to the North.
Meridian has had to pull the plug on a planned $400m wind farm near Napier due to the uncertainty surrounding Tiwai.
Barclay said the Harapaki project was "shovel ready" but that the plan could be revisited in 2022 or early 2023.
Ratings agency S&P Global said the move to put Harapaki on hols was "prudent amid the unfolding developments".
Meridian's final dividend was 11.2 cents a share, up 4 per cent on last year's final dividend, bringing the total ordinary dividend payout to 16.90c, up 3 per cent.
The company has already signalled that there will be no more special dividends while it faces the challenge posed by the planned closure of Tiwai Point.
Over the year, Meridian generated a record amount of electricity in New Zealand, supported by improved wind farm availability and lake inflows that were 115 per cent of average.
Looking ahead, Barclay said the effects of the Covid-19 pandemic and the Tiwai Point shutdown were challenges.
"These changes will affect the way in which we operate our business and we are confident we have the team and the strategies to manage through these uncertain times," he said.
Meridian shares last traded at $5.12, unchanged from Tuesday's close.