Meridian’s lake levels remained "comfortably" above average for this time of the year. In a research note, Mr Foster said December 2016 was a good month for Meridian but the high retail price increase for electricity was curious.
Forsyth Barr estimated the New Zealand energy margin for December was $74.9 million, $2.7 million higher than the previous corresponding period. The year-to-date energy margin lifted to $481 million, up $7 million on the pcp and slightly ahead of forecasts.
"The December result is slightly surprising given the continued decline in retail volumes at rates similar to post months.
"Irrigation load continues to be soft, dragging down residential and small to medium-sized enterprises sales. But the average retail price was surprisingly strong."
Sales to residential/SME customers — including irrigation loads — was down 13% in December, following a 15% fall in November, also due to irrigation, he said.
Corporate sales were down 21% due to the loss of some corporate customers. Meridian’s corporate sales had been down 20% for the past seven months.
The average retail sales price increased 13% to $99.60 a MWh and Meridian was indicating mix was a key driver in the change, although the price increase was greater than seen in November (4%) when the sales mix change was similar.
"We estimate if December had a similar 4% average price increase, retail sales would have been about $4 million lower than Meridian has disclosed," Mr Foster said.
Meridian notified the NZX its national storage fell from 113% to 109% in the month to January 17. South Island storage was 104% of average and North Island storage was at 132% on average on January 17.
Meridian’s Waitaki catchment storage at the end of December was 118% of historical average. National electricity demand in December was 2.4% lower than the same month of the previous year, Meridian said.
"While December rainfall was lower than average across much of New Zealand, soil moisture levels in South Island irrigation regions remain higher than the last two years."
New Zealand Aluminium Smelter’s average load during December was at the base quantity of the agreement, the generator said.
Meridian shares last traded at $2.70, up 1.5%.
Energy measure
A measure of available capacity over and above the capacity needed to meet normal peak demand levels. Reserve margin and reserve capacity are synonymous. For a producer of energy, it refers to the capacity of a producer to generate more energy than the system normally requires.
