Ann: QUARTER: MRP: Quarterly Operational Update

• Release Date: 24/07/14 09:03
• Summary: QUARTER: MRP: Quarterly Operational Update
• Price Sensitive: No
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					MRP
24/07/2014 09:03
QUARTER

REL: 0903 HRS Mighty River Power Limited (NS)

QUARTER: MRP: Quarterly Operational Update

Quarterly Operational Update for the three months ended 30 June 2014

Customer Energy Price down in line with forecast

Mighty River Power's average energy price for sales to customers in the
quarter to 30 June 2014 was down 4% on the prior comparable period (pcp),
reflecting the highly competitive retail electricity market.

The average energy price achieved for sales in the quarter was down $4.59/MWh
to $122.17/MWh. The lower pricing was driven by competition in both the
commercial and residential segments.  The Company commitment to not increase
headline residential energy prices, the introduction of Mercury Energy's
additional 2% Prompt Payment Discount, and the effect of absorbing increases
in local lines and transmission charges in fixed-price customer contracts
contributed to this decline in energy prices.  The energy price of $117.70
for the 12 months to 30 June represents an increase of 0.4% over the past
year, and was in line with Mighty River Power's IPO forecast for the period
of $118/MWh.

Geothermal and Hydro push generation up 10%

A partial recovery of hydro conditions in the quarter saw hydro production up
78GWh (11%) on pcp and Lake Taupo storage up 82GWh over the quarter. The lake
level at 30 June was 65% of long run average (91GWh below average) and
currently sits at 83% of long run average (as at 22 July).

Geothermal was up 135GWh (25%) on pcp due to additional production from the
Ngatamariki station (which was commissioned in September 2013) and increased
fuel availability lifting Kawerau output. Nga Awa Purua production remained
stable at the level expected until the rotor replacement (scheduled towards
late CY2015).  Less than expected fuel availability at Ngatamariki has led
the Company to bring forward drilling on a new production well which is
currently underway. We expect Ngatamariki to be back from its 72MW output
currently to 82MW by the end of calendar year 2014.

The utilisation of gas-fired generation from the Southdown station was well
down on previous periods with just 31GWh in the quarter and a record low
generation of 125GWh for the year ending 30 June. The Company is reviewing
the role of Southdown and options for the future of the plant.

Reduced commercial sales commitments, improving outcomes in wholesale

Commercial volumes (from Fixed Price Variable Volume contracts and CFD
contracts) fell on pcp as the Company actively managed its sales book, to
gain additional flexibility with hydro generation rather than using this
generation capacity to hedge low fixed-priced commercial sales. Residential
electricity sales volumes were also slightly lower due to warmer weather and
reduced acquisition and retention activity in the South Island. The average
price for generation during the quarter was $71.67MWh, outperforming the
market average and other large generators. The relative price paid for
purchases compared to the wholesale price the Company received for its
generation (LWAP/GWAP), was flat on pcp despite the additional base-load
geothermal generation. The 12 month ratio (LWAP/GWAP) was below unity for the
first time in four years.

Mighty River Power will release its financial results for the 12 months ended
30 June 2014 on 20 August 2014.
End CA:00253027 For:MRP    Type:QUARTER    Time:2014-07-24 09:03:45