Meridian Energy has revealed just how far it was prepared to go to keep its biggest customer, the Rio Tinto-controlled aluminium smelter, at Tiwai Point.
Rio announced a review of the Southland asset in October last year and said this week it planned to close the facility in August 2021.
Meridian had always seen it as a 50/50 chance that the plant would close.
Ratings agency S&P has put the company's BBB+ rating on a negative outlook from stable in response to the planned closure.
Chief executive Neal Barclay said Meridian's current financial year's performance was shaping up to be a strong one, but 2022 and 2023 would be "challenging" because of the smelter's closure.
In a conference call, Barclay said Meridian was prepared to offer Rio offer cheaper prices in return for some "term" certainty - the minimum being four years.
It offered even cheaper power over for a 10-year term.
He said he was confident Meridian's 10-year deal would have been enough to meet Rio Tinto's request for a one-third reduction in its power bill.
"What we were seeking was a stronger commitment to term," he said.
"The most recent deals that we had on the table was a four-year commitment to term.
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"It had some reduced rates. It had a demand-response premium that we felt was in both parties' interests," he said.
"More recently, the industry came together and was able to offer a transmission charge underwrite."
All up, the deal was worth initially $50 million to Rio Tinto, rising to $70m in two or three years.
"We felt that it was a pretty compelling package. We understood that we met the US dollar costs savings target they talked to us about midway through last year," he said.
"We also understood that it got the smelter to the mid-point globally, so from our perspective it looked like a pretty compelling offer going forward," he said.
And Rio "could have done better than that", if it had made a commitment to keep the plant open for another 10 years.
"If Rio Tinto had been willing to stump up for that, then we would have got them close to their ask of a one third offer, which was introduced to us last December," he said.
Meridian had been negotiating with Rio for some time and there had been no "trimming around the edges".
"Others have come to the party as well, most obviously Contact, but certainly Mercury and Genesis were there too when we were talking about the transmission underwrite idea, and we think that we put a pretty compelling proposition to them."
Barclay said Rio's decision looked to be less about power prices and more about its global strategy.
"From our perspective it looks like there is a bigger issue at play in terms of the overall Rio Tinto portfolio."
Barclay said this year's ordinary dividend would be strong.
However, the company would row back on its capital management programme - meaning no more special dividends.
"The reason for this is that the 2022 and 2023 years will be challenging years financially given the transmission work that needs to be in place to free up the Manapouri and Clutha schemes."
In February, Meridian declared an interim special dividend of 2.44 cents per share in line with the programme.
The race is now on to allow power from the deep south to be transmitted north.
For that to happen, the state-owned grid operator Transpower needs to build the Clutha Upper Waitaki Lines Project (CUWLP), due for completion in 2023.
Once CUWLP is complete, power from the southern generators can readily serve the national power grid.
Barclay said the company's focus now was on preserving its BBB+ credit rating.
S&P said the closure would materially disrupt the country's electricity market.
"Meridian is materially exposed to the disruption and its financial metrics could weaken without an adequate capital management strategy," it said.
"The negative outlook reflects the risk that a challenging operating environment for the next two to three years post the smelter closure could cause Meridian Energy's debt to EBITDA to materially exceed three times if the company does not take substantial corrective measures," it said.