Mighty River Power's high level of storage put the electricity generator in a good position for the effects of the likely El Nino, Craigs Investment Partner broker Chris Timms said yesterday.
The company's operating statistics for the three months ended September showed a lift in total generation of 17%.
During the quarter, the company's hydro generation was up 41% compared with the same period last year, due to high inflows into the Waikato catchment that were 111% of average.
The quarter ended with storage in Lake Taupo equalling 78% full and 131% of average.
National hydro storage was also above average for the period, leading to lower wholesale electricity pricing, which meant the price the company received for generation was down 19% on the pcp to $55.07 MWh.
Relative hydro yields fell versus the pcp due to a flatter generation profile with higher volumes and lower wholesale price volatility, the company said.
Mr Timms said Mighty River was susceptible to the effects of El Nino because of where its storage was.
It was encouraging storage was so high at this time of the year.
Mighty River statistics showed national demand for electricity increased 1.9% in the three months ended September, compared with the previous corresponding period.
In its quarterly operational update, Mighty River said demand rose 0.9% when adjusted for lower temperatures, but the overall rise was mainly due to higher electricity usage in urban centres - both commercial and residential - and for milk production.
This was the fifth consecutive quarter of demand growth on the pcp, the company said.
The average electricity sales price for Mighty River residential and commercial customers was $119.24 MWh, down 1.5% on the pcp.
This was partly due to Mighty River absorbing increases in lines and transmission costs for the third of its customers on fixed-price contracts.
While residential sales volumes increased on the pcp, overall customer sales volumes were down 6% as the company continued to reduce sales volumes in the low price, low margin commercial market - down 17%.
A reduction in customer numbers also reflected the highly competitive commercial market and the company's declining commercial book where contracts had historically higher yields, Mighty River said.
The company's shares last traded at $2.60, up 0.5%. The Government retains a 51% share in Mighty River.
Quarterly highlights
• A 41% increase in hydro generation due to high inflows during the quarter.
• A 1.9% rise in electricity demand, the fifth consecutive quarter where demand increased on the previous corresponding period.
• Wholesale prices fell 19% due to above average national hydro storage.
