Quarterly Operational Update

QUARTERLY OPERATIONAL UPDATE
Three months ended 31 March 2019
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE01
FY2019 HYDRO GENERATION
FORECAST DOWN 150GWh
TO LONG-RUN AVERAGE
NATIONAL DEMAND UP 3% FROM
INCREASES IN IRRIGATION AND
INDUSTRIAL SECTORS
RECORD SPOT PRICES DUE TO
LOW HYDRO STORAGE AND
THERMAL GENERATION CONSTRAINTS
>> QUARTERLY HIGHLIGHTS
RECORD
SPOT
PRICES
DEMAND
UP 3%
4,000 GWh
HYDRO
>> COMMENTARY
SUSTAINED DRY HYDROLOGICAL CONDITIONS AND THERMAL GENERATION CONSTRAINTS LED TO RECORD SPOT PRICES
Record spot prices were observed over the quarter as the market responded to limited thermal fuel and plant availability and national hydro
storage tracking below-average until the last week of March. Average spot prices for the quarter increased versus the prior comparable
period by $77/MWh to $162/MWh at Otahuhu and by $67/MWh to $145/MWh at Benmore.
HYDRO GENERATION DECREASE PARTIALLY OFFSET BY IMPROVED GEOTHERMAL AVAILABILITY
Waikato catchment inflows were 9
th
percentile
1
(or 270GWh below average) in the most recent quarter leading to hydro generation
decreasing by 273GWh from 1,035GWh in Q3-FY2018 to 762GWh in Q3-FY2019.Mercury's fullyear hydro generation forecast has been
reduced by 150GWh to 4,000GWh, the long-run annual average.
Mercury made the most of limited hydro generation as the hydro GWAP/TWAP ratio increased to 1.10 in Q3-FY2019 from 1.08 in the prior
comparable period.This, combined with steady geothermal generation, led to the LWAP/GWAP ratio decreasing from 1.06 in Q3-FY2018 to
1.05 in Q3-FY2019.
Mercury's geothermal generation for the quarter was 710GWh, an increase of 74GWh compared to the same period in FY2018 due toplanned
maintenance outages conductedin that period. These outagesenabled Mercury's geothermal fleet to provide reliable baseload generation at
98% availability versus 91% in the same period last year.
FUTURES PRICES INCREASE ON THERMAL FUELUNCERTAINTY; LONGER-TERM PRICES MODERATED BY NEW DEVELOPMENT
Ongoing uncertaintyregarding thermal fuel and plant availability flowed through to the futures market with the Otahuhu futures price for
FY2019 increasing by $15/MWh during the quarter to $150/MWh and for FY2020 by $17/MWh to $112/MWh. New generation development,
heralded by Mercury's Turitea wind farm announcement, moderated the lift in longer-term futures prices with the Otahuhu FY2021 price
rising by $8/MWh to $93/MWh over the quarter.
MERCURY CONTINUES TO PURSUE VALUE IN RETAIL MARKET
The volume-weighted average price received for Mass Market sales was flat year-on-year at $125/MWh as VWAP in Q3-FY2018 was elevated
due to a one-off wash-up of lines charges. Mercury's continued focus on customer value has seen the Mass Market VWAP for the nine
months to 31 March 2019 increase by $3.2/MWh or 2.6% compared to the same period in FY2018.
Market churn fell for the first time in four quarters, decreasing from 21.3%
2
at the end of Q2-FY2019 to 20.7%
2
as at 31 March 2019. Mercury
group churn also fell from 20.3%
2
to 19.7%
2
over the same period.
DRY CONDITIONSINCREASE IRRIGATION AND RURAL DEMAND; TIWAI POTLINE DRIVES INDUSTRIAL DEMAND HIGHER
Temperature-adjustednational demand increased by 3.0% (3.1% on an unadjusted basis) versus the prior comparable period, mainly due to
significant increases in irrigation load (+1.4%) and in the rural (+0.9%) and dairy (+0.2%) sectors which also include some irrigation demand.
Industrial sector demand (+0.8%) also increased following the first full quarter of operations for NZAS 4th potlinewhichincreased average
Tiwai demand from 572MW in the quarter ended 31 March 2018 to 610MW in the latest quarter; excluding Tiwai, industrial sectordemand
decreased by 1.0%. These increases were slightly offset by a decrease (-0.3%) in urban sector demand.
1
For quarters ended 31 March since 1927
2
12-monthly rolling average

VWAP
1
VolumeVWAP
1
VolumeVWAP
1
VolumeVWAP
1
Volume
(GWh)(GWh)(GWh)(GWh)
2
6796892,3822,423
3
350310966911
307296894938
1,0811,0553,5193,522
188211600681
1,2691,2664,1194,203
379391
335348
4443
4848
Volume
(GWh)
Volume
(GWh)
Volume
(GWh)
Volume
(GWh)
4
2284011,3251,593
Volume
(GWh)
Volume
(GWh)
Volume
(GWh)
Volume
(GWh)
7621,0353,2103,729
5
6605912,0171,908
6
5045147141
1,4721,6715,3745,778
1.051.061.061.07
7
7068247256
1
VWAP is volume weighted average energy-only price sold to customers after lines, metering and fees
2
Mass market includes residential segments and non time-of-use commercial customers
3
Fixed-price, variable-volume (FPVV) sales to time-of-use commercial customers
4
5
Includes Mercury's 65% share of Nga Awa Purua generation
6
Tuaropaki Power Company (Mokai) equity share
7
Includes carbon emissions from Mercury gas sales, wholly owned geothermals and proportionate emissions from the Mokai and Nga Awa Purua stations
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE02
VWAP
($/MWh)
VWAP
($/MWh)
147.4091.07
140.5983.01
153.5494.36
79.5779.02
Nine months ended
31 March 2019
Nine months ended
31 March 2018
($/MWh)($/MWh)
126.31123.08
OPERATING INFORMATION
Three months ended
31 March 2019
Three months ended
31 March 2018
FPVV
($/MWh)($/MWh)
ELECTRICITY SALES
Mass Market125.44125.02
Commercial & Industrial81.6880.27
153.0178.21
75.39151.69
Total NZEM Purchases87.92169.00
FPVV purchases from market
Spot customer purchases
ELECTRICITY CUSTOMERS
('000)
168.8287.34
CONTRACTS FOR DIFFERENCE
ELECTRICITY GENERATION
North Island Customers
South Island Customers
Net Sell CfD
Dual Fuel Customers
End User CfD
Includes Virtual Asset Swap volumes in both Buy and Sell CfD volumes of 148 GWh for the 3 months ended 31 March 2019 and 148 GWh for
the 3 months ended 31 March 2018 and of 450 GWh for the 9 months ended 31 March 2019 and 500 GWh for the 9 months ended 31 March
2018. Includes End User CfD volumes
160.6182.87
LWAP/GWAP
Geothermal (equity accounted)
Total
127.4086.83
144.3188.31
Hydro
Geothermal (consolidated)
VWAP
($/MWh)
VWAP
($/MWh)
CARBON EMISSIONS
('000 TONNES CO2)
>> OPERATING STATISTICS

> ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 31 MARCH
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 31 MARCH (EXCLUDING CFDs)
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE03
15%
34%
20%
18%
4%
9%
Financial Year Q3 2019
MERCURY
MERIDIAN ENERGY
CONTACT ENERGY
GENESIS ENERGY
TRUSTPOWER / TILT
OTHER
>> MARKET DATA
18%
32%
21%
17%
5%
7%
Financial Year Q3 2018
13%
87%
Financial Year Q3 2019
MERCURY
OTHER
14%
86%
Financial Year Q3 2018

> OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS
Source: NZX Hydro and NZEM Pricing Manager (NZX)
> TAUPO STORAGE
Source: NZX Hydro
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE04
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
GWh
AVERAGE NATIONAL STORAGEFY2018 NATIONAL STORAGE
FY2019 NATIONAL STORAGEROLLING 12 MONTH AVERAGE OTA PRICE
ROLLING 12 MONTH AVERAGE BEN PRICE
0
100
200
300
400
500
600
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
AVERAGE SINCE 1999FY2018FY2019

> OTAHUHU ASX FUTURES SETTLEMENT PRICE
Source: ASX
> BENMORE ASX FUTURES SETTLEMENT PRICE
Source: ASX
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE05
$73.68
$78.79
$78.83
$88.17
$79.89
$77.26
$134.59
$94.50
$84.25
$150.30
$111.81
$92.54
$0
$20
$40
$60
$80
$100
$120
$140
$160
FY19FY20FY21
$/MWh
Financial Year
AS AT 31 MARCH 2018AS AT 30 SEPTEMBER 2018AS AT 31 DECEMBER 2018AS AT 31 MARCH 2019
$67.53
$71.00
$70.94
$82.93
$73.90
$73.33
$122.45
$87.44
$80.36
$130.11
$98.30
$83.13
$0
$20
$40
$60
$80
$100
$120
$140
FY19FY20FY21
$/MWh
Financial Year
AS AT 31 MARCH 2018AS AT 30 SEPTEMBER 2018AS AT 31 DECEMBER 2018AS AT 31 MARCH 2019

> NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED)
Source: Transpower Information Exchange
> AUCKLAND CLIMATE SUMMARY ( ⁰C)
FINANCIAL YEAR
Q1Q2Q3Q4
201912.116.320.2-
201812.317.220.714.3
201712.116.119.314.3
201611.416.020.615.3
201511.915.919.914.3
Historical Average (since 1999)11.916.219.314.2
Source: Met Service
> MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICPs)
Source: Electricity Authority
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE06
8,021
8,233
8,240
8,185
8,045
8,244
1,234
1,240
1,256
1,237
1,235
1,320
0
2,000
4,000
6,000
8,000
10,000
12,000
Q3 2014Q3 2015Q3 2016Q3 2017Q3 2018Q3 2019
GWh
NATIONAL CONSUMPTIONTIWAI POINT ALUMINIUM SMELTER CONSUMPTION
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
% Churn
Monthly ICPs
NZ MARKET CHURN (LHS)ANNUAL NZ MARKET CHURN % (RHS)