State-owned power company Mighty River Power consolidated its commercial customer base in the three months ended June while at the same time losing some of its retail customers.
In figures released yesterday to the NZX, the company said its customer sales were up 12% in the three months ended June compared with the previous corresponding period (pcp).
In the year to June, the company achieved a 5% increase in sales, despite customer numbers falling by 6000 in the year.
"The growth in sales volumes was driven by our continued strong sales performance with a 29% lift in commercial sales volumes on pcp and a 14% lift over 12 months," chief executive Doug Heffernan said.
At balance date, the company had 386,000 customers compared with 392,000 a year ago.
The update will be the last before the company makes its scheduled announcement of full-year profit on August 28, which is the earliest date by which a prospectus for the Mighty River part-sale can be issued, given legal restraints that prevent a prospectus being issued within the so-called "window" before official results announcements.
The Government has announced a timetable to sell up to 49% of Mighty River by the end of September, although the timing looks likely to move out because of Maori challenges on water rights.
The offer's timing remains subject to favourable market conditions.
Prime Minister John Key announced further details of the float at the National Party's annual conference in Auckland at the weekend, including provisions intended to improve uptake by small-scale New Zealand investors.
These include a minimum parcel of $1000 of shares, no scaling back for any retail investor seeking up to $2000 of shares, and the promise of an additional share issue for long-term holders, with a likely three-year threshold to qualify.
The update figures showed sales to businesses and industry rose 29% to 679GWh hours in the three months to June, compared with the pcp, and were up 13.5% for the full year at 2412GWh.
Residential sales at 2609GWh were down 1.6% for the year, although the average price of electricity sold to customers on fixed price, variable volume contracts rose to $115.48 per Megawatt hour, up 4.6% on the 2010-11 financial year.
Mighty River has been willing to lose retail customers in recent times after mopping up more of the residential market than intended during aggressive marketing campaigns in 2009 and 2010, including significant new customer bases in the South Island, where it was traditionally inactive because it has no South Island generation capacity.
The latest update highlighted significant price separation between the North and South Islands, influencing higher wholesale electricity purchase prices, Mr Heffernan said.
Low hydro inflows to South Island lakes pushed up prices in the south. Constrained capacity on the Cook Strait capable made that worse by limiting total volumes of electricity capable of being sent from the North to the South Island to compensate.
That saw wholesale electricity purchase costs rise 58.2% from $47.44 per MWh on average in 2010-11 to $113.36 per MWh in 2011-12.
Total generation volumes for the year were 7068GWh, up from 6833GWh in the pcp. Generation in the quarter under review was down 1640GWh, reflecting high inflows to the company's Waikato catchments the previous winter.
As a result, Mighty River used its Southdown gas-fired plant in Auckland more heavily in the latest quarter, producing 179MWh of electricity, compared with 33GWh in the same quarter a year earlier.
Green Party co-leader Russel Norman continued his attack on the proposed partial sale of state-owned assets yesterday.
"If Mr Key is right, and the majority of these shares would be bought by retail investors, then the potential cost of a share giveaway is in the order of hundreds of millions of dollars."
If only a third of the shares were bought by retail investors and there was one free share for every 10 bought, that was a $200 million liability for the taxpayer, Dr Norman said.
