Meridian Energy monthly operating report for July 2019

PG 1

Meridian Energy monthly operating report for July 2019
16 August 2019
Attached is Meridian Energy Limited's monthly operating report for the month of July 2019.
Highlights this month include:
▪ In the month to 12 August 2019, national hydro storage decreased from 108% to 106% of historical average
▪ South Island storage sat at 113% of average and North Island storage at 80% of average on 12 August 2019
▪ Meridian’s July 2019 monthly total inflows were 125% of historical average
▪ Meridian’s Waitaki catchment storage at the end of July 2019 was 129% of historical average
▪ Storage in Meridian’s Waiau catchment was above average at the end of July 2019
▪ National electricity demand in July 2019 was 1.1% lower than the same month last year
▪ Meridian made calls on load under the Genesis Swaption in July 2019
▪ July 2019 was New Zealand’s second warmest July on record with temperatures above average across the
country. Rainfall was above average for the majority of the South Island, while it was drier in the north and
east of the North Island
▪ New Zealand Aluminium Smelter's load during July 2019 was below the contract level of 622MW
▪ Meridian’s New Zealand retail sales volumes in July 2019 were 15.0% higher than July 2018
ENDS
Neal Barclay
Chief Executive
Meridian Energy Limited

For investor relations queries, please contact:
Owen Hackston
Investor Relations Manager
021 246 4772
For media queries, please contact:
Claire Shaw
External Communications Manager
021 370 677

M O N T H LY O P ER AT I N G R EP O RT
J U LY 2 0 1 9

J U LY H I G H L I G H T S
In the month to 12
August 2019, national
hydro storage decreased
from 108% to 106% of
historical average
South Island storage sat
at 113% of average and
North Island storage at
80% of average on 12
August 2019
Meridian’s July 2019
monthly total inflows
were 125% of historical
average
July 2019 was New Zealand’s
second warmest July on
record with temperatures
above average across the
country. Rainfall was above
average for the majority of
the South Island, while it was
drier in the north and east of
the North Island
New Zealand Aluminium
Smelter's load during July
2019 was below the contract
level of 622MW
Meridian’s New Zealand
retail sales volumes in July
2019 were 15.0% higher than
July 2018
Meridian’s Waitaki
catchment storage at the
end of July 2019 was
129% of historical
average
Storage in Meridian’s
Waiaucatchment was
above average at the end
of July 2019
National electricity
demand in July 2019 was
1.1% lower than the
same month last year
Meridian made calls on
load under the Genesis
Swaptionin July 2019
Meridian Energy Limited Monthly Operating Report for July 20192
16 August 2019

MARKET DATA
▪National electricity demand in July 2019
was 1.1% lower than the same month last
year
▪July 2019 was New Zealand’s second
warmest July on record with temperatures
above average across the country. Rainfall
was above average for the majority of the
South Island, while it was drier in the
north and east of the North Island
▪Demand in the last 12 months was 0.2%
higher than the preceding 12 months
▪New Zealand Aluminium Smelter's load
during July 2019 was below the contract
level of 622MW
▪12-month average switching rate of
customers changing retailers but not
moving (“trader” switch) was 7.4% at the
end of June 2019
▪12-month average switching rate of
customers moving and changing retailers
(“move-in” switch) was 13.1% at the end
of June 2019
Source: Electricity Authority
Source: Electricity Authority
3
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
2,600
2,800
3,000
3,200
3,400
3,600
3,800
4,000
JanFebMarAprMayJunJulAugSepOctNovDec
GWh
NATIONAL DEMAND
Range (2009-2018)201420152016201720182019
5%
7%
9%
11%
13%
15%
Jun 14Dec 14Jun 15Dec 15Jun 16Dec 16Jun 17Dec 17Jun 18Dec 18Jun 19
12 month average
MARKET ICP SWITCHING (ALL RETAILERS)
Industry Move-in SwitchIndustry Trader Switch

MARKET DATA
▪July 2019 saw near-term ASX prices rise as
national storage declined and gas and
transmission outages planned for Q1 2020
were announced
▪National storage decreased from 108% of
average on 8 July 2019 to 106% of average
on 12 August 2019
▪South Island storage decreased to 113% of
historical average on 12 August 2019.
North Island storage increased to 80% of
average
Source: ASX
Source: ASX
Source: NZX
4
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
70
90
110
130
150
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
$/MWh
OTAHUHU ASX FUTURES SETTLEMENT PRICE
28 February 201929 March 201930 April 2019
31 May 201928 June 201931 July 2019
70
90
110
130
150
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
$/MWh
BENMORE ASX FUTURES SETTLEMENT PRICE
28 February 201929 March 201930 April 2019
31 May 201928 June 201931 July 2019
0
1,000
2,000
3,000
4,000
5,000
JanFebMarAprMayJunJulAugSepOctNovDec
GWh
NATIONAL HYDRO STORAGE (12 August 2019)
85yr Average199220042008
2012201720182019

NEW ZEALAND RETAIL
▪Meridian’s New Zealand customer
connection numbers rose 0.9% during July
2019
▪This month saw customer increases in agri
(Farmsource), large business (All of
Government) and Powershop, which
recorded its highest monthly customer
gains ever
▪Retail sales volumes in July 2019 were
15.0% higher than July 2018
▪Compared to July 2018, residential/SMB
sales volumes increased by 4.2%
(increases in all segments) and corporate
sales volumes increased by 34.6%
Source: Meridian
*excludes volumes sold to New Zealand Aluminium Smelters and CFDs
Source: Meridian
5
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
350
00000000000
248
336
347
326
345
301
280
359
345
334
289
310
329
185
182
171
178
180
168
196
189
223
219
228
219
0
100
200
300
400
500
600
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
MERIDIAN'S RETAIL SALES VOLUMES*
FY20 Residential/SMBFY20 CorporateFY19 Residential/SMBFY19 Corporate
Meridian
operating
information
110
00000000000
119
76
107
107
108
108
108
109
109
109109
109
109109
119
119
119
119
119
119
119
119
119
119
119
119
66
66
67
68
69
69
70
71
72
73
74
74
0
50
100
150
200
250
300
350
JulAugSepOctNovDecJanFebMarAprMayJune
ICPs ('000)
MERIDIAN'S NZ CUSTOMER CONNECTIONS
FY20 Meridian NIFY20 Meridian SIFY20 Powershop
FY19 Meridian NIFY19 Meridian SIFY19 Powershop

NEW ZEALAND STORAGE
▪July 2019 monthly inflows were 125% of
historical average
▪Meridian’s Waitaki catchment storage
moved from 1,931GWh to 1,745GWh
during July 2019
▪Waitaki storage at the end of July 2019
was 129% of historical average and 9%
higher than the same time last year
▪Storage in Meridian’s Waiaucatchment
was above average at the end of July 2019
6
16 August 2019
Source: Meridian
Source: Meridian
Meridian Energy Limited Monthly Operating Report for July 2019
0
200
400
600
800
1,000
1,200
1,400
200620072008200920102011201220132014201520162017201820192020
GWh
Financial
year
MERIDIAN'S COMBINED CATCHMENT INFLOWS
July86 year average
0
500
1,000
1,500
2,000
2,500
1-Jan1-Mar1-May1-Jul1-Sep1-Nov
GWh
MERIDIAN'S WAITAKI STORAGE
Average 1979-201320152016201720182019
Meridian
operating
information

NEW ZEALAND GENERATION
▪Meridian’s New Zealand generation in July
2019 was 2.6% higher than the same
month last year, reflecting higher hydro
generation and lower wind generation
▪The average price Meridian received for its
generation in July 2019 was 39.7% higher
than the same month last year
▪The average price Meridian paid to supply
contracted sales in July 2019 was 36.1%
higher than the same month last year
Source: Meridian
*price received for Meridian’s physical generation
Source: Meridian
7
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
0
200
400
600
800
1,000
1,200
1,400
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
MERIDIAN'S NEW ZEALAND GENERATION
FY20 HydroFY20 WindFY19 HydroFY19 Wind
101
72
77
87
285
149
99
125
153
171
100
96
95
0
50
100
150
200
250
300
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
MERIDIAN'S AVERAGE GENERATION PRICE*
FY20FY19
Meridian
operating
information

AUSTRALIAN RETAIL
▪Australian retail electricity sales volumes
in July 2019 were 7.7% higher than the
same month last year
▪Powershop Australia electricity customer
connection numbers rose 1.4% during July
2019
▪Gas customer connection numbers rose
6.6% during July 2019
Source: Meridian
Source: Meridian
8
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
63
58
57
48
41
37
39
44
38
45
41
49
58
0
10
20
30
40
50
60
70
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
AUSTRALIAN RETAIL ELECTRICITY SALES VOLUMES
FY20FY19
176
4
20
40
41
20
17
99
13
25
102
64
0
20
40
60
80
100
120
140
160
180
200
JulAugSepOctNovDecJanFebMarAprMayJun
TJ
AUSTRALIAN RETAIL GAS SALES VOLUMES
FY20FY19
Meridian
operating
information

AUSTRALIAN GENERATION
▪Meridian’s Australian generation in July
2019 was 23.4% lower than the same
month last year, reflecting lower wind
generation and hydro generation
Source: Meridian
9
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
61
3
74
64
43
40
37
36
33
30
33
36
49
49
10
11
25
30
26
23
29
21
16
11
1
3
0
10
20
30
40
50
60
70
80
90
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
MERIDIAN'S AUSTRALIAN GENERATION
FY20 WindFY20 HydroFY19 WindFY19 Hydro
Meridian
operating
information

NEW ZEALAND
JULY
2019
MONTH
JULY
2018
MONTH
JUNE
2019
MONTH
MAY
2019
MONTH
New Zealand sales
Retail contracted sales volume (GWh)599521548538
Average retail contractedsales price
1
($NZ/MWh)$113.5$113.1$113.9$112.7
NZAS sales volume (GWh)463426448463
Financial contract sales volumes
2
(GWh)150386129168
Average wholesale & financial contracts sales price
3
($NZ/MWh)$69.9$63.9$69.6$72.3
Retail customer supply volumes (GWh)645541592578
Cost to supplyretail customers ($NZ/MWh)$110.4$87.1$102.8$113.3
Cost to supply wholesale customers ($NZ/MWh)$97.9$68.9$89.7$93.1
Cost of financial contracts ($NZ/MWh)$101.9$71.8$103.0$96.3
TotalNew Zealand customer connections
4
304,993292,091302,277301,508
New Zealand generation
Hydro generation volumes (GWh)1,1111,0701,1321,125
Wind generation volumes (GWh)116126100123
Total generation volumes (GWh)1,2271,1961,2321,248
Average generationprice
5
($NZ/MWh)$100.7$72.1$95.2$96.5
New Zealand hedging
Hedging volume
6
(GWh)145170138149
Hedging costs ($NZ/MWh)$65.0$65.7$63.9$66.3
Hedging spot revenue average price ($NZ/MWh)$104.4$74.5$97.5$101.9
Future contract close outs ($NZ m)-$0.3-$0.1-$0.1-$0.4
10
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
Meridian operating information

AUSTRALIA
JULY
2019
MONTH
JULY
2018
MONTH
JUNE
2019
MONTH
MAY
2019
MONTH
Australian contracted sales
Retail contracted electricity sales volume (GWh)63585849
Average electricity contractedsales price
1
($A/MWh)$149.8$149.6$159.7$162.2
Retail contracted gas sales volume (TJ)176464102
Average gas contractedsales price
1
($A/TJ)$13.9$16.1$19.4$15.4
Financial contract sales volumes
2
(GWh)544251
Financial contractedsales average price ($A/MWh)$83.3$80.7$64.1
Cost to supplyelectricity customers ($A/MWh)$105.5$103.1$133.7$112.4
Cost to supplygas customers ($A/MWh)$11.8$14.8$29.4$11.7
Cost of financial contracts ($A/MWh)$86.9$100.2$70.1
Powershopelectricity customer connections
7
111,37396,743109,804108,332
Powershopgas customer connections
8
23,5531,13722,61221,426
11
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
Meridian operating information

AUSTRALIA
12
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
JULY
2019
MONTH
JULY
2018
MONTH
JUNE
2019
MONTH
MAY
2019
MONTH
Australian generation
Wind generation volumes (GWh)61744949
Average wind generationprice
5
($A/MWh)$122.3$153.0$126.1$143.9
Hydro generation volumes (GWh)31031
Average hydro generationprice
5
($A/MWh)$81.0$37.3$77.4$79.3
PPA generation received (GWh)353133
Average PPA generationprice [net of costs] ($A/MWh)$22.9$34.2$40.4
Australian hedging
Hedging volume
6
(GWh)395180
Hedging costs ($A/MWh)$81.9$95.9$65.6
Hedging spot revenue average price ($A/MWh)$91.0$99.0$58.2
Future contract close outs ($A M)$0.0-$0.1$0.1$0.0
Meridian operating information

MERIDIAN GROUP
Footnotes
1.Contracted sales volumes and volume weighted average price received from
contracted customers less distribution costs
2.Derivatives sold excluding the sell-side of virtual asset swaps
3.Average price of both NZAS sales volume and derivative sales volumes
4.Meridian Retail and Powershop New Zealand installation control points (ICPs),
excluding vacants
5.Volume weighted average price received for Meridian’s physical generation
6.Over the counter and ASX contract volumes excluding the buy-side of virtual asset
swaps
7.Financially responsible market participants, excluding vacants
8.Meter installation registration numbers
13
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
JULY
2019
MONTH
JULY
2018
MONTH
JUNE
2019
MONTH
MAY
2019
MONTH
Meridian Group
Employee and Operating Costs ($m)24222926
Stay in Business Capital Expenditure ($m)4595
Investment Capital Expenditure ($m)1112
Total Capital Expenditure ($m)56107
Meridian operating information

JulAugSepOctNovDecJanFebMarAprMayJun
201920192019201920192019202020202020202020202020
New Zealand contracted sales
Retail contracted sales volume (GWh)599
Average retail contracted sales price ($NZ/MWh)$113.5
NZAS sales volume (GWh)463
Financial contract sales volumes (GWh)150
Average wholesale & financial contracts sales price ($NZ/MWh)$69.9
Retail customer supply volumes (GWh)645
Cost to supply retail customers ($NZ/MWh)$110.4
Cost to supply wholesale customers ($NZ/MWh)$97.9
Cost of financial contracts ($NZ/MWh)$101.9
Total New Zealand customer connections304,993
New Zealand generation
Hydro generation volume (GWh)1,111
Wind generation volume (GWh)116
Total generation volume (GWh)1,227
Average generation price ($NZ/MWh)$100.7
New Zealand hedging
Hedging volume (GWh)145
Hedging costs ($NZ/MWh)$65.0
Hedging spot revenue average price ($NZ/MWh)$104.4
Future contract close outs ($NZm)-0.3
Australia contracted sales
Retail contracted electricity sales volume (GWh)63
Average electricity contracted sales price ($A/MWh)$149.8
Retail contracted gas sales volume (TJ)176
Average gas contracted sales price ($A/TJ)$13.9
Financial contract sales volumes (GWh)54
Financial contracted sales average price ($A/MWh)$83.3
Cost to supply electricity customers ($A/MWh)$105.5
Cost to supply gas customers ($A/MWh)$11.8
Cost of financial contracts ($A/MWh)$86.9
Powershop electricity customer connections111,373
Powershop gas customer connections23,553
Australia generation
Wind generation volume (GWh)61
Average wind generation price ($A/MWh)$122.3
Hydro generation volume (GWh)3
Average hydro generation price ($A/MWh)$81.0
PPA generation received (GWh)35
Average PPA generation price [net of costs] ($A/MWh)$22.9
Australia hedging
Hedging volume (GWh)39
Hedging costs ($A/MWh)$81.9
Hedging spot revenue average price ($A/MWh)$91.0
Future contract close outs ($A M)$0.0
Meridian Group
Employee and Operating Costs ($NZ m)24
Stay in Business Capital Expenditure ($NZ m)4
Investment Capital Expenditure ($NZ m)1
Total Capital Expenditure ($NZ m)5
FY20 OPERATING INFORMATION
14
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
Meridian operating information

JulAugSepOctNovDecJanFebMarAprMayJun
201820182018201820182018201920192019201920192019
New Zealand contracted sales
Retail contracted sales volume (GWh)521529497524481448555534557508538548
Average retail contracted sales price ($NZ/MWh)$113.1$110.7$106.7$98.3$98.5$95.5$98.2$102.0$101.3$105.4$112.7$113.9
NZAS sales volume (GWh)426426411439444463463418463448463448
Financial contract sales volumes (GWh)386196140149146217157196187168168129
Average wholesale & financial contracts sales price ($NZ/MWh)$63.9$58.5$58.0$65.9$72.7$68.9$69.4$80.6$80.3$73.0$72.3$69.6
Retail customer supply volumes (GWh)541560528554509468581572587538578592
Cost to supply retail customers ($NZ/MWh)$87.1$90.0$95.0$309.8$183.0$115.5$141.3$171.6$186.0$113.4$113.3$102.8
Cost to supply wholesale customers ($NZ/MWh)$68.9$74.4$88.7$284.1$137.1$98.1$125.8$153.6$168.2$97.5$93.1$89.7
Cost of financial contracts ($NZ/MWh)$71.8$93.1$94.3$267.7$152.7$116.5$126.1$156.8$163.0$104.4$96.3$103.0
Total New Zealand customer connections292,091292,906293,386294,695296,064296,532297,621299,351299,905301,230301,508302,277
New Zealand generation
Hydro generation volume (GWh)1,0701,1239598979059721,0221,0151,0461,0601,1251,132
Wind generation volume (GWh)1269011510799831161048199123100
Total generation volume (GWh)1,1961,2131,0741,0041,0041,0551,1381,1191,1281,1591,2481,232
Average generation price ($NZ/MWh)$72.1$77.2$86.8$284.6$149.5$98.8$125.3$153.1$171.5$99.8$96.5$95.2
New Zealand hedging
Hedging volume (GWh)170167147200190177155142186144149138
Hedging costs ($NZ/MWh)$65.7$63.1$62.5$77.7$74.7$61.7$69.3$66.6$71.2$65.0$66.3$63.9
Hedging spot revenue average price ($NZ/MWh)$74.5$80.8$87.9$290.6$180.8$104.6$127.7$157.7$168.4$103.1$101.9$97.5
Future contract close outs ($NZm)-0.1-0.3-0.6-0.5-0.5-0.5-0.4-0.7-2.8-1.1-0.4-0.1
Australia contracted sales
Retail contracted electricity sales volume (GWh)585748413739443845414958
Average electricity contracted sales price ($A/MWh)$149.6$162.2$159.7
Retail contracted gas sales volume (TJ)4204041201799132510264
Average gas contracted sales price ($A/TJ)$16.1$15.4$19.4
Financial contract sales volumes (GWh)5142
Financial contracted sales average price ($A/MWh)$64.1$80.7
Cost to supply electricity customers ($A/MWh)$103.1$112.4$133.7
Cost to supply gas customers ($A/MWh)$14.8$11.7$29.4
Cost of financial contracts ($A/MWh)$70.1$100.2
Powershop electricity customer connections96,74396,80196,65797,51498,61899,368101,020102,730104,450106,240108,332109,804
Powershop gas customer connections1,1374,7767,5589,57711,33312,50814,30916,75118,22519,99021,42622,612
Australia generation
Wind generation volume (GWh)746443403736333033364949
Average wind generation price ($A/MWh)$153.0$143.9$126.1
Hydro generation volume (GWh)1011253026232921161113
Average hydro generation price ($A/MWh)$37.3$79.3$77.4
PPA generation received (GWh)3331
Average PPA generation price [net of costs] ($A/MWh)$40.4$34.2
Australia hedging
Hedging volume (GWh)8051
Hedging costs ($A/MWh)$65.6$95.9
Hedging spot revenue average price ($A/MWh)$58.2$99.0
Future contract close outs ($A M)-$0.1$0.0$0.1
Meridian Group
Employee and Operating Costs ($NZ m)222324222222222223222629
Stay in Business Capital Expenditure ($NZ m)534543333459
Investment Capital Expenditure ($NZ m)111111121121
Total Capital Expenditure ($NZ m)6456544545710
FY19 OPERATING INFORMATION
15
16 August 2019
Meridian Energy Limited Monthly Operating Report for July 2019
Meridian operating information

Acquired generationvolumesbuy-side electricity derivativesexcludingthe buy-side of virtual asset swaps
Average generation pricethe volume weighted average price received for Meridian’s physical generation
Average retail contracted sales pricevolume weighted average electricity price received from retail customers, less distribution costs
Average wholesale contracted sales pricevolume weighted average electricity price received from wholesale customers, including NZAS
Combined catchment inflowscombined water inflows into Meridian’s Waitaki and Waiau hydro storage lakes
Cost of acquired generationvolume weighted average price Meridian pays for derivatives acquired to supplement generation
Cost to supply contracted salesvolume weighted average price Meridian pays to supply contracted customer sales
Contracts for Difference (CFDs)an agreement betweenparties to pay the difference between the wholesale electricity price and an agreed fixed
price for a specified volume of electricity. CFDs do not result in the physical supply of electricity
Customer connections (NZ)number of installation control points, excluding vacants
FRMPfinancially responsible market participant, excluding vacants
GWhgigawatt hour. Enough electricity for 125 average New Zealand households for one year
Historic average inflowsthe historic average combined water inflows into Meridian’s Waitaki and Waiau hydro storage lakes over the last 84
years
Historic average storagethe historic average level of storage in Meridian’s Waitaki catchment since 1979
HVDChigh voltage direct current link between the North and South Islands of New Zealand
ICPNew Zealand installation control points, excluding vacants
ICP switchingthe number of installation control points changing retailer supplier in New Zealand, recorded in the month the
switch was initiated
MIRNmeter identification reference number
MWhmegawatt hour. Enough electricity for one average New Zealand household for 46 days
NationaldemandElectricity Authority’s reconciled grid demand www.emi.ea.govt.nz
NZASNew Zealand Aluminium SmeltersLimited
Retail sales volumescontract sales volumes to retail customers, including both non half hourly and half hourly metered customers
Sellside derivativessell-side electricity derivatives excluding thesell-side of virtual asset swaps
Virtual Asset Swaps(VAS)CFDs Meridian has with Genesis Energy and Mercury. They do not result in the physical supply of electricity
16
16 August 2019
G L O S S A R Y
Meridian Energy Limited Monthly Operating Report for July 2019
Meridian operating information