October 2017 Operating Report

Monthly Operating ReportOctober 2017

»
For the month of October 2017 Contact recorded:
• Electricity and gas sales of 655 GWh (October
2016: 673 GWh)
• Netback of $81.99/MWh (October 2016:
$79.57/MWh)
• Cost of energy was $30.22/MWh (October 2016:
$26.82/MWh)
»
Otahuhu futures settlement wholesale price for the
4
th
quarter of 2017 (ASX):
• As at 15 November 2017: $70/MWh• As at 31 October 2017: $61/MWh• As at 30 September 2017: $52/MWh
»
As at 15 November 2017, South Island controlled storage was 100% of mean (31 October 2017: 98%) and North Island storage was 115% of mean (31 October 2017: 121%)
• As at 15 November, total Clutha scheme storage
(including uncontrolled storage) was 68% of mean
• Inflows into Contact’s Clutha catchment for Octobe
r
2017 were at 47% of mean
October overview
Operating report
Contact Energy Limited
2
»
The proportion of total generation from renewable resources for the month of October 2017 was over 95%, the highest ever recorded by Contact.

Hydro storage and forward pricesNew Zealand controlled hydro storage against mean
Operating report
Contact Energy Limited
Benmore ASX futures settlement
Otahuhu ASX futures settlement
3
-
500
1,0001,5002,0002,5003,0003,5004,000
Nov
16
Dec
16
Jan
17
Feb
17
Mar
17
Apr
17
May
17
Jun
17
Jul
17
Aug
17
Sep
17
Oct
17
GWh
South Island Actual
North Island Actual
South Island Mean
National Mean
0
1020304050607080
CY17
CY18
CY19
CY20
$/MWh
30/06/2016
29/09/2017
31/10/2017
0
1020304050607080
CY17
CY18
CY19
CY20
$/MWh
30/06/2016
29/09/2017
31/10/2017

Wholesale market
Wholesale electricity pricing
Operating report
Contact Energy Limited
Distribution of wholesale market price by trading p
eriods
Benmore nodeOtahuhu node
4
0
20406080
100120140
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
$/MWh
FY17 BEN
FY18 BEN
FY17 OTA
FY18 OTA
0%
20%40%60%80%
100%
<$35
$36-$45 $46-$55 $56-$65 $66-$75 $76-$85
>$85
% of trading periods
Oct 17
Oct 16
Sep 17
0%
20%40%60%80%
100%
<$35
$36-$45 $46-$55 $56-$65 $66-$75 $76-$85
>$85
% of trading periods
Oct 17
Oct 16
Sep 17

-
500
1,000 1,500 2,000 2,500 3,000 3,500 4,000
15 16 17
15 16 17
15 16 17
15 16 17
15 16
15 16
16 17
16 17
16 17
16 17
16 1
7
16 17
GWh
North Island
South Island
NZAS
Electricity demand
Source: Contact and Electricity Authority grid dema
nd (reconciled) http://www.emi.ea.govt.nz
Operating report
Contact Energy Limited
Regional demand change (%) on October 2016
Total national demand (FY16, 17 and 18)
»
New Zealand electricity demand was up 1.2% on Octob
er 2016 (down 2.0%
on October 2015).
»
Cumulative 12 months demand for November 2016 to Oc
tober 2017 of
40,983 GWh is 0.1% higher than the prior comparativ
e period.
5
Jul Aug Sep Oct Nov Dec Jan
Feb Mar Apr May Jun
0%
(6%)
2%
(3%)
2%
0%
0%
0%
3%
2%
1%
(1%)
5%
Year
11%
1%
(2%)
(5%)
2%

10 15 20 25 30 35 40 45 50 55 60
-
100 200 300 400 500 600 700 800 900
16 17
16 17
16 17
16 17
16
16
17
17
17
17
17
17
$/MWh
GWh
Geothermal
Hydro
Thermal
Cost of Energy
Contact’s Generation business performance
Generation mix and cost of energy (FY17 and 18)
Operating report
Contact Energy Limited
6
Jul Aug Sep Oct N
ov Dec Jan Feb Mar
Apr May Jun
Year

6065707580859095100105110
0
100200300400500600700800900
16 17
16 17
16 17
16 17
16
16
17
17
17
17
17
17
$/MWh
GWh
Commercial & industrial electricity sales
Mass market electricity sales
Retail gas sales
Netback
Retail sales volumes and netback (FY17 and 18)Contact’s Customer business performance
7
Jul Aug Sep Oct No
v Dec Jan Feb Mar
Apr May Jun
Year
Operating report
Contact Energy Limited

Contact’s operational performance
8
Operating report
Contact Energy Limited
Data
Measure
The month ended
October 2017
The month ended
October 2016
The month ended
September 2017
Four months ended
October 2017
Four months ended
October 2016
Customer
Mass market electricity sales
GWh
292

301

332

1,398

1,420

Commercial & industrial electricity sales
GWh
284

301

280

1,137

1,224

Retail gas sales
GWh
79

72

85

352

302

Total electricity and gas sales
GWh
655

673

697

2,887

2,946

Average electricity sales price
$/MWh
183.87

181.20

191.54

192.42

190.73

Electricity direct pass through costs
$/MWh
(83.03)

(81.99)

(90.01)

(84.48)

(81.30)

Electricity and gas cost to serve
$/MWh
(12.29)

(13.71)

(11.68)

(11.26)

(13.43)

Netback
$/MWh
81.99

79.57

82.30

88.46

89.06

Electricity line losses
%
6%
5%
6%
6%
5%
Retail gas sales
PJ
0.2

0.2

0.3

1.1

1.0

LPG sales
tonnes
6,064

5,623

6,558

27,742

26,867

Electricity customer numbers
1
#
422,500

423,000

423,000

Gas customer numbers
1
#
64,500

62,500

64,500

LPG customer numbers (includes franchises)
1
#
82,500

75,500

82,000

Generation
Thermal generation
GWh
29

128

41

649

594

Geothermal generation
GWh
292

205

290

1,181

1,048

Hydro generation
GWh
305

343

325

1,084

1,316

Spot market generation
GWh
625

676

655

2,915

2,959

Spot electricity purchases
GWh
611

633

647

2,695

2,786

CfD sales / (purchases)
GWh
19
32
(55)
13
52
Steam sales
GWh
64

65

67

215

234

Commercial & industrial electricity sales
GWh
10

10

9

31

33

GWAP
$/MWh
52.67

45.35

53.29

85.57

50.48

LWAP
$/MWh
(58.59)

(49.73)

(59.43)

(91.91)

(55.70)

LWAP/GWAP
%
111%
110%
112%
107%
110%
Gas used in internal generation
PJ
0.5

1.3

0.6

6.2

6.0

Gas storage net movement
2
PJ
0.6

(0.1)

0.5

(0.1)

(1.3)

Unit generation cost
$/MWh
(29.05)

(33.84)

(28.07)

(34.33)

(32.52)

Cost of energy
$/MWh
(30.22)

(26.82)

(27.47)

(34.18)

(26.41)

Glossary of terms
NetbackMeasures the performance of the Customer business. This enables the performance of the retail channels to be measured without using an energy cost. The netback is meant to cover, inter alia, the net purchase cost, capital return, risk margin and a retail margin.
Electricity revenue from mass market and C&I custom
ers
Add:
Revenue from gas sales
Add:
Revenue from steam sales and direct electricity sal
es from Te Rapa
Less:
Electricity distribution network costs, meter costs
and electricity levies
Less:
Gas distribution network costs, meter costs and gas
levies
Less:
Operating costs to serve the customer, including he
ad office allocation
Cost of EnergyMeasures the performance of the Generation business.Cost of energy reflects the total operational costs of generating and procuring electricity sold to customers. It does not include any capital return expectations.
Wholesale electricity revenue from our generating a
ssets
Less:
Electricity purchase costs from the wholesale marke
t to supply customers
Less:
Electricity transmission costs and levies
Less:
Gas and diesel purchase costs (excluding gas purcha
ses for retail gas sales)
Less:
Gas transmission costs and levies
Less
: Carbon emissions costs
Less:
Generation operating costs and head office allocati
on
Netback and cost of energy is divided by the total
retail sales volumes (electricity and gas sales) to
be expressed as $/MWh

Keep in touch
Operating report
Contact Energy Limited
10
contact.co.nz@ContactEnergyLinkedin.com/company/contact-energy-ltdFacebook.com/contactenergyYoutube.com/ContactEnergyinvestor.centre@contactenergy.co.nzcontact.co.nz/corporate/investor-centre+64 4 462 1323+64 21 072 8578
Investor RelationsMatthew Forbes - Investor Relations Manager
Contact Energy