December 2018 Operating Report

Monthly Operating Report
December 2018

For the month of December 2018
»The Customer business recorded:
•Mass market electricity and gas sales of 296 GWh
(December 2017: 289 GWh)
•Mass market electricity and gas netback of
$89.16/MWh(December 2017 $87.34/MWh)
»The Generation business recorded:
•Contracted Wholesale electricity sales, including
that sold to the Customer business, totalled 641
GWh(December 2017: 693 GWh)
•Electricity and steam net revenueof $76.96/MWh
(December 2017: $65.84/MWh)
•Electricity generated (or acquired) in the month of
699 GWh(December 2017: 777 GWh)
•The unit generation cost, which includes acquired
generation was $41.93/MWh(December 2017:
$40.85/MWh)
December overview
Operating reportContact Energy Limited
2
»Otahuhufutures settlement wholesale price for the 1
st
quarter of 2019 (ASX):
•As at 16 January 2019: $132/MWh
•As at 31 December 2018: $125/MWh
•As at 30 November 2018: $96/MWh
»As at 16 January 2019, South Island controlled storage
was 91% of mean (31 December 2018: 104%) and
North Island controlled storage was 96% of mean (31
December 2018: 66%)
•As at 16 January 2019, total Clutha scheme
storage (including uncontrolled storage) was 76%
of mean
•Inflows into Contact’s Clutha catchment for
December 2018 were 69% of mean (November
2018: 106%, October 2018: 89%, September 2018:
72%)

Hydro storage and forward prices
New Zealand controlled hydro storage against mean
Operating reportContact Energy Limited
Benmore ASX futures settlement
Otahuhu ASX futures settlement
3
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jan
18
Feb
18
Mar
18
Apr
18
May
18
Jun
18
Jul
18
Aug
18
Sep
18
Oct
18
Nov
18
Dec
18
GWh
South Island ActualNorth Island Actual
South Island MeanNational Mean
0
20
40
60
80
100
120
CY19CY20CY21CY22
$/MWh
29/06/201830/11/201831/12/2018
0
20
40
60
80
100
120
CY19CY20CY21CY22
$/MWh
29/06/201830/11/201831/12/2018

Wholesale market
Wholesale electricity pricing
Operating reportContact Energy Limited
Distribution of wholesale market price by trading periods
Benmore node
Otahuhu node
4
0
50
100
150
200
250
300
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
FY18 BENFY19 BENFY18 OTAFY19 OTA
0%
20%
40%
60%
80%
100%
<$35$36-$60$61-$85$86-$110$111-$135$136-$160>$160
% of trading periods
Dec-18Dec-17Nov-18
0%
20%
40%
60%
80%
100%
<$35$36-$60$61-$85$86-$110$111-$135$136-$160>$160
% of trading periods
Dec-18Dec-17Nov-18

-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
161718161718161718161718161718161718171817181718171817181718
GWh
North IslandSouth IslandNZAS
Electricity demand
Operating reportContact Energy Limited
5
Source: Contact and Electricity Authority grid demand (reconciled) http://www.emi.ea.govt.nz
Regional demand change (%) on December 2017
Total national demand (FY17, 18 and 19)
»New Zealand electricity demand was down 4.6% on December 2017 (down
2.3% on December 2016)
•Cumulative 12 months demand for January 2018 to December 2018 of
41,116 GWh is flat on the prior comparative period.
Month Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
(1%)
(5%)
(1%)
(7%)
(12%)
1%
(46%)
(2%)
(1%)
0%
0%
0%
Year
0%
(1%)
(32%)
(9%)
(3%)

Contact’s Wholesale business performance
Generation mix, gross sales position and unit generation cost (FY18 and 19)
Operating reportContact Energy Limited
6
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Year
-
10
20
30
40
50
60
-
100
200
300
400
500
600
700
800
900
17 18 17 18 17 18 17 18 17 18 17 18 18 19 18 19 18 19 18 19 18 19 18 19
$/MWh
GWh
GeothermalHydroThermalAcquired generationContracted electricity salesUnit generation cost (RHS)

Retail sales volumes and netback (FY18 and 19)
Contact’s Customer business performance
7
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Year
Operating reportContact Energy Limited
-
20
40
60
80
100
0
100
200
300
400
500
600
17 18 17 18 17 18 17 18 17 18 17 18 18 19 18 19 18 19 18 19 18 19 18 19
$/MWh
GWh
Mass market electricity salesRetail gas salesNetback

Contact’s operational performance
8
Operating reportContact Energy Limited
Measure
The month ended The month ended The month ended Six months endedSix months ended
December 18December 17November 18December 18December 17
CustomerMass market electricity salesGWh
246 246 259 1,874 1,907
Retail gas salesGWh
50 43 59 485 452
Mass market electricity and gas salesGWh
296 289 317 2,359 2,358
Average electricity sales price$/MWh
250.48 250.69 248.94 242.57 240.42
Electricity direct pass thru costs$/MWh
(127.49)(131.98)(119.98)(116.36)(117.99)
Cost to serve$/MWh
(23.04)(20.54)(20.85)(17.02)(17.47)
Customer netback$/MWh
89.16 87.34 92.82 91.66 89.90
Energy cost$/MWh
(58.52)(57.02)(61.08)(71.59)(71.05)
Actual electricity line losses%
7%9%8%7%8%
Retail gas salesPJ
0.2 0.1 0.2 1.7 1.4
Electricity ICPs (rounded to the nearest 500)#
406,000 416,500 406,000
Gas ICPs (rounded to the nearest 500)#
65,000 64,500 65,500
WholesaleElectricity sales to Customer businessGWh
266 270 282 2,017 2,069
Electricity sales to Commercial and IndustrialGWh
260 283 261 1,572 1,736
Electricity CFD salesGWh
116 140 114 708 658
Contracted electricity salesGWh
641 693 657 4,296 4,463
Steam salesGWh
56 54 66 351 330
Total electricity and steam net revenue$/MWh
76.96 65.84 68.71 78.89 74.42
C&I netback (at the ICP)$/MWh
83.79 70.57 67.92 84.05 82.94
C&I line losses%
4%1%4%4%4%
Thermal generationGWh
38 203 31 836 966
Geothermal generationGWh
227 265 273 1,652 1,726
Hydro generationGWh
365 258 440 2,045 1,635
Spot electricity salesGWh
631 726 744 4,532 4,327
Electricity sales -DirectGWh
9 10 10 51 50
Acquired generationGWh
59 42 42 171 384
Electricity generated (or acquired)GWh
699 777 796 4,754 4,762
Unit generation cost (including acquired generation)$/MWh
(41.93)(40.85)(29.39)(35.06)(37.39)
Spot electricity purchasesGWh
(516)(543)(533)(3,538)(3,755)
CFD salesGWh
(116)(140)(114)(708)(658)
Spot exposed purchases / CFD settlementGWh
(632)(683)(648)(4,246)(4,413)
Spot revenue and settlement on acquired generation
(GWAP)
$/MWh
101.96 120.45 164.23 134.35 92.23
Spot purchases and settlement on CFDs sold (LWAP)$/MWh
(109.71)(124.77)(181.10)(138.65)(96.96)
LWAP/GWAP%
108%104%110%103%105%
Gas used in internal generationPJ
0.6 2.0 0.5 8.1 9.6
Gas storage net movement (extraction) / injectionPJ
0.2 (0.7)0.4 (2.0)(0.8)

Contact’s operational performance -history
9
Operating reportContact Energy Limited
Measure
Jul-17Aug-17Sep-17Oct-17Nov-17Dec-17Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18Oct-18Nov-18
Dec-18
Customer
Mass market electricity sales
GWh
409 365 332 292 263 246 248 234 265 285 325 385 400 365 320 285 259
246
Retail gas sales
GWh
100 87 85 79 57 43 34 37 50 57 75 100 108 104 89 75 59
50
Mass market electricity and gas sales
GWh
509 453 417 371 319 289 282 272 315 342 400 485 508 469 409 360 317
296
Average electricity sales price
$/MWh
227.83 239.33 238.43 245.70 248.57 250.69 255.99 244.89 246.45 244.83 243.21 235.32 235.88 238.14 241.66 246.06 248.94
250.48
Electricity direct pass thru costs
$/MWh
(106.85)(110.32)(125.71)(119.86)(121.09)(131.98)(125.13)(120.77)(121.85)(115.04)(117.31)(112.56)(112.44)(111.06)(114.50)(117.87)(119.98)
(127.49
)
Cost to serve
$/MWh
(14.25)(14.48)(17.17)(18.92)(22.79)(20.54)(25.21)(23.82)(22.09)(18.12)(16.21)(15.21)(13.26)(14.64)(15.15)(19.27)(20.85)
(23.04)
Customer netback
$/MWh
91.32 96.95 81.19 90.70 90.39 87.34 96.50 89.98 92.14 98.05 94.03 88.71 91.59 92.82 92.36 90.48 92.82
89.16
Energy purchase cost
$/MWh
(86.97)(80.78)(69.62)(61.09)(57.97)(57.02)(68.74)(72.00)(77.39)(71.54)(82.67)(86.77)(84.65)(79.53)(69.09)(65.64)(61.08)
(58.52)
Actual electricity line losses
%
7%8%6%7%10%9%7%6%4%7%11%6%5%7%8%7%8%
7%
Retail gas sales
PJ
0.3 0.3 0.3 0.2 0.2 0.1 0.1 0.2 0.2 0.2 0.3 0.4 0.4 0.4 0.3 0.3 0.2
0.2
Electricity ICPs (rounded to the nearest 500)
#
420,000 420,000 419,500 419,000 417,500 416,500 415,500 415,000 414,000 414,000 414,000 413,000 411,500 407,500 406,500 406,500 406,000
406,000
Gas ICPs (rounded to the nearest 500)
#
64,000 64,500 64,500 64,500 64,500 64,500 64,500 64,500 64,500 65,000 65,000 65,000 65,000 65,000 65,000 65,500 65,500
65,000
Wholesale
Electricity sales to Customer business
GWh
443 397 354 314 292 270 267 249 277 304 366 409 423 394 346 306 282
266
Electricity sales to Commercial and Industrial
GWh
284 293 288 291 297 283 285 261 288 268 284 253 254 269 267 261 261
260
Electricity CFD sales
GWh
106 104 103 103 103 140 109 84 94 101 111 108 115 113 108 143 114
116
Contracted electricity sales
GWh
833 795 745 707 691 693 660 594 660 674 761 771 791 775 721 710 657
641
Steam sales
GWh
26 58 67 64 61 54 44 46 51 55 39 20 30 63 68 69 66
56
Total electricity and steam net revenue
$/MWh
90.04 82.23 73.92 65.89 65.56 65.84 70.75 70.82 76.15 75.93 84.45 94.86 91.34 83.58 72.82 78.04 68.71
76.96
C&I netback (at the ICP)
$/MWh
103.25 91.24 89.34 75.91 67.48 70.57 75.52 78.79 86.57 86.35 93.51 106.26 96.37 89.81 80.03 86.06 67.92
83.79
C&I line losses
%
6%3%5%5%6%1%1%3%4%4%5%4%3%4%7%2%4%
4%
Thermal generation
GWh
365 215 41 29 114 203 305 113 38 55 147 188 198 201 216 152 31
38
Geothermal generation
GWh
300 300 290 292 279 265 257 245 275 274 283 263 273 291 295 293 273
227
Hydro generation
GWh
185 270 325 305 293 258 191 267 323 366 380 316 317 322 243 358 440
365
Spot electricity sales
GWh
850 785 655 625 687 726 753 625 636 694 810 767 788 813 754 803 744
631
Electricity sales -Direct
GWh
3 8 9 10 10 10 10 8 9 8 4 1 4 9 10 10 10
9
Acquired generation
GWh
62 44 90 82 65 42 27 31 37 0 6 33 17 9 22 22 42
59
Electricity generated (or acquired)
GWh
916 837 755 716 761 777 790 665 682 703 821 802 808 831 785 835 796
699
Unit generation cost (including acquired
generation)
$/MWh
(45.60)(38.49)(31.48)(34.29)(31.54)(40.85)(44.68)(34.21)(28.56)(23.78)(27.06)(33.82)(35.22)(31.85)(36.27)(36.62)(29.39)
(41.93)
Spot electricity purchases
GWh
(723)(682)(632)(595)(579)(543)(542)(501)(557)(564)(646)(661)(673)(654)(604)(557)(533)
(516)
CFD sales
GWh
(106)(104)(103)(103)(103)(140)(109)(84)(94)(101)(111)(108)(115)(113)(108)(143)(114)
(116)
Spot exposed purchases / CFD settlement
GWh
(829)(787)(735)(697)(681)(683)(651)(586)(651)(666)(757)(770)(788)(767)(711)(700)(648)
(632)
Spot revenue and settlement on acquired
generation (GWAP)
$/MWh
137.88 82.28 54.51 53.43 92.91 120.45 118.17 65.04 58.40 56.91 56.82 101.42 79.16 82.66 86.51 283.25 164.23
101.96
Spot purchases and settlement on CFDs sold
(LWAP)
$/MWh
(149.05)(86.05)(58.20)(57.51)(100.50)(124.77)(125.81)(69.57)(62.03)(62.05)(63.62)(105.45)(80.72)(86.52)(89.73)(297.49)(181.10)
(109.71)
LWAP/GWAP
%
108%105%107%108%108%104%106%107%106%109%112%104%102%105%104%105%110%
108%
Gas used in internal generation
PJ
3.1 2.0 0.6 0.5 1.3 2.0 2.7 1.2 0.6 0.7 1.4 1.4 1.8 1.8 1.9 1.5 0.5
0.6
Gas storage net movement (extraction) /
injection
PJ
(1.0)(0.2)0.5 0.6 (0.0)(0.7)(0.5)0.2 0.3 0.5 0.4 (0.4)(0.3)(0.7)(1.0)(0.5)0.4
0.2

Customer business
10
Operating reportContact Energy Limited
What is Netback?
»Measures 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 customers
Add: Revenue from gas sales, broadband and legacy meters
Less: Carbon emission costs on the sale of retail gas
Less: Electricity distribution network costs, meter costs and electricity levies
Less: Gas distribution network costs, meter costs and gas levies
Less: Direct operating costs to serve the customer, (excludes head office allocation)
Customer netback ($/MWh)
x
Massmarket electricity and gassales
(GWh)
Electricity sales to Customer business (GWh)
x
FPVV market linked supply from Wholesale
(FY18 average: $80/MWhat the GXP ie
before network losses)
Retail gas sales (PJ)
x
Average gas cost
(FY18 average: $5.80/GJ)
NETBACK
ELECTRICITY COST
GAS COST
Estimating Customer EBITDAF from the operating report
Components of EBITDAF
Energy purchase cost

Wholesale business
11
Operating reportContact Energy Limited
The wholesale business revenues are predominantly linked to ASX futures
Generation costs
•Electricity transmission and levies
•Thermal fuel (gas and diesel)
•Carbon costs
•Gas transmission and levies
•Wholesale operating costs
Acquired generation cost
•Cost of electricity CFD purchases
bought for fuel replacement
•Cost of options for fuel replacement
Electricity sales to Customer
•Fixed price variable volume sales to Customer
business mass market at a market price
Electricity sales to C&I (netback)
•Fixed price variable volume sales to C&I,
includes retailing margin. C&I is shown as a
netback (i.e. net of all pass through and cost to
serve)
•Only the margin from C&I spot sales is shown
(volumes and costs removed –agency
relationship only)
•Direct C&I sales from a generation site
CFD electricity sales
•Revenue from contracts for difference (CFD) –
includes support for NZAS andretailers
Other income
•Revenue from the sale of steam, net proceeds
on wholesale gas sales, net proceeds on
ancillary services, ASX market making and
other income
CONTRACTED
GENERATION COST
TRADING / MERCHANT
Total electricity and steam revenue ($/MWh)
x
Contracted electricity and steam sales (GWh)
Unit generation cost (including acquired
generation) ($/MWh)
x
Electricity generated (or acquired) (GWh)
Spot revenue and settlement on acquired
generation (GWAP)
x
Spot electricity sales + acquired generation (GWh)
Spot purchases and settlement on CFDs sold
(LWAP)
x
Spot exposed purchases / CFD settlement (GWh)
Spot electricity sales to the wholesale
market / settlement of acquired generation
•Spot electricity sales
•Settlement on acquired generation
Purchases from the wholesale market /
settlement on CFD sales
•Spot electricity purchases
•Settlement on CFD sales
Estimating Wholesale EBITDAF from the operating report

Additional insights
12
Operating reportContact Energy Limited
EBITDAF
Customer business EBITDAF (see page 10)
Add: Wholesale EBITDAF (see page 11)
Add: LPG EBITDAF -Sold 30 November 2018 -FY18: $32m, FY19: $14m, FY20: nil
Less: Corporate costs (FY18: $24m), will only be updated at results (half and full)
Q: Why are Wholesale contracted sales higher than previously reported?
A: Contact now reports on the gross CFD sales made (these where previously net settled into wholesale revenue), this
includes the CFD to support the Tiwaismelter and other market participants. The settlement costs of these contracts has
also been included as an effective electricity purchase. Grossing up the CFDs also give a clearer understanding of Contact’s
effective generation and sales position.
Q: Why are C&I sales volumes lower than previously reported?
A:Contact acts as an agent to allow some sophisticated C&I customers access to the wholesale spot market, as Contact
does not take any risk or generate to cover this load, these sales (along with the costs) are eliminated from what is reported.
For further information please refer to page 13 for contact details to discuss.
FAQ:

Keep in touch
Operating reportContact Energy Limited
13
contact.co.nz
@ContactEnergy
Linkedin.com/company/contact-energy-ltd
Facebook.com/contactenergy
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investor.centre@contactenergy.co.nz
contact.co.nz/aboutus/investor-centre
+64 4 462 1323
+64 21 072 8578
Investors
Matthew Forbes -Investor Relations Manager
To find out more about Contact Energy