Trustpower hopes the government inquiry into retail power prices will be wide and take into account all factors that push up bills.

The new Government will hold an inquiry into prices with its scope determined before Christmas.

New Energy Minister Megan Woods said she would work out the terms of reference during the next few weeks.

"New Zealanders are paying a lot for their power and we want to see why that is and what opportunities there are for making electricity more affordable," she told the Herald.


The minister said she wanted to know how bills could be simplified so customers could tell exactly what they're paying for.

Trustpower boosted its profit by 80 per cent for the past six months and its chief executive, Vince Hawksworth, said wholesale prices had firmed this winter as supply tightened but retail energy charges had been stable for several years.

While transmission and distribution costs may have moved up, energy costs had been kept in check by intense competition among a growing number of retailers.

Hawksworth said his company had simplified bills as much as possible and its customers were most concerned about the total price.

Net profit rose to $80.8 million in the six months ended September 30, from $45 million a year earlier, the Tauranga-based company said.

Operating revenue lifted 3.7 per cent to $520.1m, while operating expenses fell 7.8 per cent to $360.9m.

Trustpower increased its New Zealand generation by a quarter to 1325 gigawatt hours in the first half, compared with the same period a year earlier, largely due to strong inflows at its North Island hydro-plants that saw North Island generation climb to 732 GWh from 518 GWh a year earlier.

The average spot price generated soared 62 per cent to $89 per megawatt hours but Trustpower's geographically diverse generation stations allowed it to take advantage of record high inflows in some parts of New Zealand while other parts were facing extremely low inflows in the South Island.

Hawksworth said the market had reached a balance in supply and demand, although he said considerable uncertainty exists as to the long-run supply and demand balance.

He said growth in customer numbers had been modest as the company put its campaigning on hold while it leveraged high wholesale electricity prices.

However, he said its current marketing campaign for new bundle customers was proving "very successful" and the company is on track for a 20 per cent increase in telecommunication customers this year. The company was now trying to lock in higher-value customers for two years with deals including a free television.

The number of customers with two or more products reached 94,000 in the latest period, a 4 per cent increase from 90,000 at March 31, and 80 per cent of new customers now buy more than one product, he said.

Trustpower reiterated its forecast for annual earnings before interest, tax, depreciation, amortisation and fair value adjustments to be between $255m and $270m. First-half earnings on that measure lifted 44 per cent to $159m.

Trustpower was also reviewing its ownership of three hydro stations in New South Wales. The stations had generation totalling 100MW and a value of about $150m, Hawksworth said.

The company will pay a first-half dividend of 17c a share on December 8, compared with 17.1c in the year-earlier period.
•additional reporting BusinessDesk