Meridian Energy Limited 2019 Full Year Financial Results

Release






M e r i d i a n E n e r g y L i m i t e d ( A R B N 1 5 1 8 0 0 3 9 6 ) A c o m p a n y i n c o r p o r a t e d i n N e w Z e a l a n d
L e v e l 2 , 5 5 L a d y E l i z a b e t h L a n e , P O B o x 1 0 8 4 0 , W e l l i n g t o n 6 1 4 3

m e r i d i a n e n e r g y . c o . n z
Stock Exchange Listings NZX (MEL) ASX (MEZ)
Meridian Energy posts record earnings of $838 million
26 August 2019
Meridian Energy has reported record earnings and net profit off the back of its strong hydro
conditions, trans-Tasman customer growth and higher wholesale market prices.

Group EBITDAF increased by 26% to $838 million, while net profit reached $339 million, up from
$201 million. The results reflect a record level of hydro generation in New Zealand, and higher
wholesale prices as a result of supply interruptions at the Pohokura gas field, and periods of low
hydro inflows.

Chief Executive Neal Barclay says Meridian’s outstanding performance has allowed the company to
lift total dividends to government and shareholders by 11%, while overseeing a decrease in average
energy prices for households and small businesses.

“Our full year result has delivered for Meridian customers and the company’s shareholders, including
the Crown. I’m privileged to lead a company whose commercial performance and decision making is
driven by principles alongside profitability,” Mr Barclay says.

Customer numbers increased by 4% in New Zealand and 36% in Australia. Meridian’s Powershop
brand expanded into new Australian states and broadened its product offering to include retailing
reticulated gas.

“Our customer growth and market leading customer satisfaction rates have defied industry trends.
They are a clear vote of confidence for our commitment to doing right by people, and doing right by
the environment, whilst providing a great level of service,” Barclay says.

The company has also been supportive of the government’s Electricity Pricing Review.

“We support action and policies that result in a genuinely fairer, more affordable, competitive and
efficient energy market,” Barclay says.

Meridian has also continued to lead the industry’s response to climate change, strongly backing the
Zero Carbon Bill while announcing plans to reforest 1,000 ha of land and halve its operational
emissions by 2030. This year, the company was the first in New Zealand to publicly disclose the
financial risks it faces because of climate change.

"Enhanced by our new identity that underscores Meridian’s commitment to 100% renewable
generation from wind, water and sun, we’re working with government, industry, communities and
individuals to make the bold changes needed to achieve a net zero carbon New Zealand,” Barclay
says.

Meridian’s full integrated report can be found here.

m e r i d i a n e n e r g y . c o . n z
PG 2

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
Corporate Communications Manager
021 370 677

---

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Meridian
Energy
Limited.

Integrated
Report 2019.

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2
Meridian Annual Report 2019
Introduction
The
Power
to Make
a Difference.
We’re serious about
clean energy for a fairer
and healthier world.
We believe it’s the only
way forward. We want
people to feel positive
about their world and
our shared environment.
We want them to know
there is hope for our
future. And we want to
work together with them
to create a world we can
all be proud to be part of.

04What we do
07How we create value
12Setting our course
13Directors’ statement
21Chair and CEO — – The difference we made this year
24What drives us
29Our climate action plan
34Helping our customers make a difference now
35The difference we made this year
50A different tomorrow
57Making the most of powerful forces
58Our elements of success
72Our powerful future
75Rewarding strong performance
85Further disclosures
102Financial statements
147Financial auditor’s report
151GRI Standards assurance report
153Global Reporting Initiative (GRI) Content index
157Directory
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NZ
AUFLUX
1 Excludes Tiwai Point Aluminium Smelter
4
Meridian Annual Report 2019
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What we do
Retailing as:
Meridian Energy
Powershop
Retailing as:
Powershop, and providing energy services
to DC Power and Kogan Energy
5 Offices
840 Employees
(100 at our power stations)
1 Office
80 Employees
(10 at our power stations)
1 Office
160 Employees
(3 in the UK)
This is our business
Customers
Generation
~30% national electricity generation
32
57
302K
Customer connections
Licensing the Flux platform
and the Powershop brand
~15% national retail volume
1
132K
Customer connections (incl gas)
<1% National Energy Market retail volume
4
Clients (Software)

These are our customers
NZAS
A large financial contract with
New Zealand Aluminium Smelter
(NZAS) at Tiwai Point, equivalent to 
around 38% of Meridian’s generation
Meridian
228K
Customer connections:
residential
business
corporate
agri-business
Powershop Australia
110K
Electricity customer connections
22K
Carbon-neutral gas customer connections
Now in South Australia
Powershop can now be found in
four Australian states, giving us
broad coverage in Australia
Powershop NZ
74K
Customer connections:
residential
business
Under licence
The Powershop brand and Flux
platform operate under licence to the
large UK electricity retailer nPower
75K
nPower customer connections
NZ
AUFLUX
5
Meridian Annual Report 2019
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What we do
Transitioning to the Flux platformAll on the Flux platformAll on the Flux platform
Now over 300,000 customer connections
on the Flux platform in total

NZ
AUFLUX
This is what we generate
New Zealand’s largest
electricity generator
~30% national electricity generation
1.7M
Equivalent to the power
needs of around
200,000 New Zealand
homes yearly
Equivalent to the
power needs of
around 1.7 million
New Zealand
homes yearly
White Hill
West Wind
Mill Creek
Te Āpiti
Te Uku
Waitaki and
Manapōuri
generate around
50% of NZ’s
total hydro
200K
Generating <1% of the
National Energy Market
50K
Equivalent to the
power needs of
around 116,000
Australian
homes yearly
Equivalent to the
power needs of
around 50,000
Australian
homes yearly
Mt Millar
Mt Mercer
Hume
Burrinjuck
Keepit
116K
Enough electricity for about 167k homes yearly
6
Meridian Annual Report 2019
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What we do

7
How we create value
Meridian Annual Report 2019
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How we create value
We own hydro power stations
and wind farms that generate
the electricity we sell into the
wholesale market. We also
purchase back electricity from
the wholesale market to sell
directly to customers.

8
How we create value
Meridian Annual Report 2019
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1 
Wholesale market prices can
vary significantly in New Zealand
depending on what technologies
are able to generate electricity at
any point in time. Prices can be
significantly affected by rainfall, as
well as gas availability. In the short to
medium term, we manage this risk
for our physical supply customers by
offering fixed pricing. We also offer
financial contracts to businesses that
buy directly from the spot electricity
market to limit their exposure to price
variations. These contracts, plus a
range of other financial instruments
and forward contracts, also help
control our commercial risks around
price volatility and they smooth out
our earnings across the year.
2 
The wholesale market price
is affected by the dynamics
of supply and demand. If there is
too much electricity available, the
wholesale price goes down. If the
over supply persists, older, less
economic generation plant may
shut down in response. Alternatively,
if demand for electricity is rising
over time, the wholesale price will
generally track up. If there is not
enough generation to meet rising
demand, the price for the available
electricity goes up, improving the
business case for investment in
new power stations. The additional
generation made possible by the
investment in new plant restores
the supply-demand balance and
the price stabilises again.
3 
There are a number of other
factors that can affect the
supply-demand balance. NZAS
closing the Tiwai Point aluminium
smelter, for example, would reduce
demand. Climate change also has
the potential to increase or reduce
supply, and to increase demand,
because climate action regulations
could increase electricity consumption
through electric vehicles and electric
boilers. Equally, the transition
required to respond to climate
change could lead to disruption
of emissions-intensive industries,
decreasing demand.
4 
The ways in which we can sell
our electricity and determine a
price are controlled by the electricity
market, and by the Government and
regulators. As the main regulator in
New Zealand, the Electricity Authority
can also decide if our behaviour has
been fair to our competitors and
to our customers. We contribute to
conversations on public policy to help
ensure the markets we operate in are
open, fair and efficient. We believe
markets with these characteristics
benefit consumers and enable our
long-term success.
1
2
3
4
Vertical integration

9
How we create value
Meridian Annual Report 2019
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1
23
1 
Our customers are businesses,
households and other electricity
companies. We have three retail
brands: Meridian and Powershop
in New Zealand, and Powershop
in Australia. Because there are
so many retailers, we need to
differentiate ourselves from our
competitors with strong brands and
by marketing through traditional
media and digital channels.
Meridian and Powershop Australia
are attractive to customers because
of our positioning as a leader in
sustainability. This is demonstrated
by our Group commitment to
renewable electricity and climate
action. Powershop New Zealand
is attractive because it offers
customers control over their energy
usage and cost in a fun, irreverent
and engaging way.
2 
All our energy retailing brands
have very short supply chains
because the physical assets used to
distribute electricity and meter its use
are managed by national and local
lines and metering companies. Our
retail operations’ requirements are
similar to those of many corporate
offices. They include physical facilities
and ICT, sales and marketing, billing
and governance functions.
Great customer experience
3 
In order for us to operate our
brands profitably in Australia
and New Zealand we need to keep
earning our customers’ loyalty by
providing excellent experiences
through our frontline service teams.
Those teams and our customers
rely on platforms like Flux to
ensure they can interact smoothly
and effectively. Flux also markets
its software platform and the
Powershop brand under licence
in the UK.

10
How we create value
Meridian Annual Report 2019
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1
2
4
3
1 
Our ability to generate electricity
safely and reliably is dependent
on the quality of our assets and ICT
systems, supported by highly skilled
employees, suppliers and contractors.
Our assets are maintained by
Meridian staff (with some of our
wind farms also maintained by third
parties) who contract with a range of
local and global suppliers to provide
us with the parts and components
needed to build and maintain our
generation assets, as well as a mix of
general engineering consumable and
specialist parts suppliers, and service
providers including ICT and facilities’
management providers.
2 
Because there are environmental
implications around how we use
our assets to generate renewable
energy, we are dependent on
securing and maintaining resource
consents. To do this we need
to win and maintain the trust
of stakeholders, ranging from
Ngāi Tahu and other iwi to water
users, local government and
communities. We achieve this by
making a long-term and deep
commitment to the communities
and areas in which we operate
through engagement, employment
and consultation on important
issues such as water, biodiversity,
environmental impact, local
prosperity and long-term planning
and environmental management.
Without the buy-in of our people,
stakeholder groups, communities
and local government, we could not
operate our assets the way we do,
which would materially affect our
profitability and reduce the amount
of renewable electricity available
for Aotearoa’s power needs.
3 
Our ability to attract and
retain the right staff is central to
our competitiveness in all our business
activities, and is supported by a strong
employer brand grounded in our
purpose, values and behaviours, and
how successful we are in creating a
great place to work.
4 
Finally, as a publicly listed
company we are dependent
on our investors having continued
faith in our performance.
Responsible generation

11
How we create value
Meridian Annual Report 2019
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1
2
Reliable returns
1 
The money we make from the
electricity we generate on the
wholesale market, plus the margin
we receive from our business and
residential customers, combined
with our skill in managing trading
conditions, determines how much
revenue we make in a year. A portion
of that is then reinvested into our
business to support our ongoing
programme of work. The value
of our shares is what the market
perceives our company to be worth
at any given point in time.
2 
Our shareholders, including
the Government (which holds
a 51% share), earn money from their
investments in us in two ways: from
the dividend payments we make
every year; and from the changes in
our share price, which allow them
to sell our shares when they are
more valuable and potentially buy
more shares when prices dip. No
guarantee of our current or future
share price is given or implied. We
also have other investors in long-term
funding arrangements with us.
All our investors decide to invest
based on their own knowledge,
the information we share with them,
and their own understanding of
the markets. And investors want
us to be able to tell them a strong
and compelling story around our
management of all the components
that make up how we create value –
our financial reserves, physical assets,
technology platforms, our people, the
relationships we have with a variety
of stakeholders, and natural resources
(particularly water) – hence this
integrated report.

Setting
our
course
12
Directors’ statement
Meridian Annual Report 2019
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We are one of the largest
companies on the New Zealand
Stock Exchange.
13
Directors’ statement
Meridian Annual Report 2019
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Focused on governance
The Meridian Group
2
is listed
on both the New Zealand Stock
Exchange (NZX) and the Australian
Stock Exchange (ASX), and we are
substantial in scale in a New Zealand
context, with operating revenue
this year of $3,491 million, EBITDAF
3

of $838 million and net assets of
$5,457 million, although we have a
modestly sized workforce of around
1,080 people
4
who are directly
employed by or contracted to us,
and third parties who provide us
with ICT, facilities’ management
and meter-reading services.
This year, we became New Zealand’s
largest company on the NZX, with
a total market capitalisation in excess
of $12 billion. The New Zealand
Government is our majority share-
holder, and we are precluded by
legislation from having any other
significant shareholders (i.e. more
than 10% holding).
As a business with a significant
retail shareholder base, Meridian is
constantly looking for ways to be
as accessible and open as possible.
We engage with investors and the
Crown through reports like this,
our disclosures to the markets,
and meetings and briefings with
a range of groups and officials.
The Board has a policy of rotating
the location of the annual shareholder
meeting between Auckland,
Wellington and Christchurch, and
our 2019 meeting will be held in
Christchurch. We’ll provide you with
more information closer to the time
in the Notice of Meeting. If you
can’t attend, you’ll find a link to a live
webcast on the Meridian website.
2 For FY19 the Meridian Group included the parent
company Meridian Energy Limited and all its
operational subsidiaries (note the Group structure
in the financial statements). Throughout the report,
non-financial data and commentary pertain to the
Meridian Group as much as possible. References
to ‘Meridian’ (the parent company), ‘Powershop
New Zealand’, ‘Powershop Australia’ and ‘Flux’
are used when only specific parts of the Group
are being discussed (‘Powershop Australia’ refers to
our retailing operations in Australia; the generation
activities in Australia are included in discussions of
Meridian’s generation activities). In both the data and
commentary. Dam Safety Intelligence is included in
the parent company and Flux-UK Limited employees
are included in ‘Flux’, unless specifically mentioned.
3 Earnings before interest, tax, depreciation,
amortisation and changes in fair value of hedges 
and other significant items.
4 See page 101 for a detailed breakdown
of our workforce.
Directors’ statement

14
Directors’ statement
Meridian Annual Report 2019
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Welcome to this report
This integrated report is a review
of our financial, economic, social
and environmental performance
for FY19 and has been prepared
using the International Integrated
Reporting Council’s Integrated
Reporting Framework. It reflects the
Board’s view that the way in which
Meridian takes care of its customers,
its people, its local communities,
iwi and the environment supports
our ability to continue delivering
shareholder returns.
The Board has established
processes to ensure the quality and
integrity of this integrated report
and has entrusted Management
with preparing and presenting it
accordingly, and our policy is to
seek assurance of both our financial
and non-financial information.
The financial information in this
report has been prepared in
accordance with appropriate
standards, details of which can
be found on page 109, and has
been audited by Deloitte Limited
on behalf of the Auditor-General
(see the Independent Auditor’s Report
on page 147). The non-financial
information in this report has been
prepared in accordance with
the Core requirements of the
Global Reporting Initiative’s
Sustainability Reporting Standards
(the GRI Standards) and has also
been assured by Deloitte Limited
(see the Independent Accountant’s
Assurance Report on page 151).
The Board sets Meridian’s overall
appetite for risk and its approach to
risk management. A list of Meridian’s
key risks can be found in the FY19
Corporate Governance Statement
and they are discussed throughout
this report. The remainder of the risks
and how we manage them are also
detailed where relevant throughout
this report.
View Corporate
Governance Statement
This year we have prepared a
report specifically on the risks and
opportunities of climate change,
based on guidance from the Task
Force for Climate-related Financial
Disclosures (TCFD). These matters are
included throughout this report.
View TCFD Report
Our Meridian Group Greenhouse Gas 
Inventory Report has been assured
by Deloitte Limited and a summary is
provided in this report.
View Greenhouse Gas
Inventory Report
In addition, we have again been
assessed for inclusion into the
Dow Jones Sustainability Index and
responded to the Carbon Disclosure
Project (CDP). The CDP is a not-for-
profit charity that runs a global
disclosure system for investors,
companies, cities, states and regions
to manage their environmental
impacts. We use feedback from
these and our assurance processes to
continually improve our disclosures.

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Directors’ statement
Meridian Annual Report 2019
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Focusing on what’s important
In deciding what to report, our
objective is to report openly
and responsibly on how all
our interdependencies relate
and collectively contribute to
the positive change we look to
make in the world.
Management select topics for
reporting that reflect the decisions
we’ve made in terms of our
sustainability priorities, and tailor
them according to what has been
important to our stakeholders in
the reporting year. This process
also allows us to re-evaluate if
our sustainability priorities require
adjusting to reflect trends or
changes in emphasis.
First, a broad list of topics is generated
from the GRI Standards, the United
Nations Sustainable Development
Goals (SDGs), electricity-sector-
specific issues, topics that have
come up in the media, Meridian’s
risk register, Board discussions and
other sources. We also use regular
interactions with our stakeholders
to canvass them on their priorities.
Using internal workshops, this list of
topics is evaluated by Management for
relevance to our business, importance
in terms of scale and significance of
impact on our stakeholders and the
natural environment, and impacts on
our ability to create value (in other
words their impacts on the resources
upon which we rely). Topics are rated
high, medium and low, with the
first two categories prioritised for
reporting (see our GRI Index on page
153 for a full list of reported topics).
A variety of other topics are considered
relevant and are actively managed by
the business, but are not considered
significant enough to be included
in this report.

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Directors’ statement
Meridian Annual Report 2019
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Our Board structure
Meridian recruits Board members
with a range of skills and experience.
Biographies of our directors and the
Executive Team are available on our
website at meridianenergy.co.nz. All
directors are independent directors.
While the company’s constitution
does not require it, this Board has
a collective view that Ngāi Tahu,
who have mana whenua (authority)
over the majority of the South Island
where most of Meridian’s assets are,
is such an important stakeholder
that a position on the Board should
always be considered. This role
is currently undertaken by Anake
Goodall, a former Chief Executive
of Te Rūnanga o Ngāi Tahu
(Ngāi Tahu’s governing body).
Chris Moller, a Board member from
2008 and our Chair since 2011, will
retire this year.
Mark Verbiest will take over the role
of Chair from October 2019. Mark
was appointed to the Meridian Board
in 2017 and is an experienced company
director with years of involvement in
the energy sector. We welcome Mark
to his new role and look forward to
his insights and energy.
The Board also bids farewell to
Mary Devine, who will step down
as a director after the 2019 Annual
Shareholder Meeting in October,
following the announcement
in March that she has taken up
the role of Managing Director,
Hallenstein Glasson Holdings Limited.
Mary has been a director for nine
years, including time as Chair of our
Remuneration and Human Resources
Committee. Mary has brought
deep knowledge of marketing and
brand to the Board and has been
instrumental in building the strong
collaborative culture that we have
today. We thank her for her energy
and her relentless customer focus
during her time with us.
In August 2018, the Board farewelled
Steve Reindler. Steve had a passion
for Meridian, particularly in the fields
of engineering, sustainability and
health and safety and Chaired the
Safety and Sustainability Committee.
We are grateful for Steve’s significant
contribution during the decade he
was a director.
In August 2019, Meridian announced
three new directors will join the
Meridian Board. Michelle Henderson
and Julia Hoare will commence as
directors prior to Meridian’s Annual
Shareholders’ Meeting in October 2019
and both will retire and seek formal
shareholder approval for their election
at that meeting. Nagaja Sanatkumar
will also seek formal shareholder
approval for her election at the Annual
Shareholders’ Meeting and, if elected,
will commence her role as a Director
on 1 January 2020.
The role of our Board
Boards have an important
role in overseeing companies’
activities. Strategy days and
regular meetings allow our
Board to share their thoughts,
and challenge Management,
on the direction in which they
wish to take the business and
how they’re managing the
various long-term drivers of
value (such as retaining access
to water, building employee
engagement, investing in
new assets, enhancing
environmental performance,
satisfying customers, and
building the company’s
reputation and brand).
Meridian complies with all the
recommendations of the NZX
Corporate Governance Code
(other than Recommendation
3.6 (Takeover Protocol), which
is a result of our 51% Crown
ownership) and has also adopted
the corporate governance
principles of the New Zealand
Financial Markets Authority and
the ASX. You can read about
how we have fulfilled those
recommendations and applied
those principles in our FY19
Corporate Governance Statement.
View Corporate
Governance Statement
Thank you
The Board and people of Meridian
would like to acknowledge the
considerable and skilful leadership
and experience that Chris Moller
has brought to the role of Chair.
Chris joined the board in 2008 and
has been our Chair since 2011. He
has been a strong hand at the helm
as the company evolved through
the mixed-ownership-model to
become New Zealand’s largest
listed company and the most
successful company in the electricity
sector in New Zealand and Australia
in terms of total shareholder return.
He will retire this year, and we wish
to take this opportunity to thank
him for his service and for the
guidance he has provided.
Mark Verbiest
Chair Elect

17
Directors’ statement
Meridian Annual Report 2019
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Chris Moller
Chair
Mary Devine
Director
Peter Wilson
Deputy Chair
Anake Goodall
Director
Mark Verbiest
Director
Mark Cairns
Director
Jan Dawson
Director
View Director Biographies
Our Board
Diversity of perspective
is important. Meridian
recruits Board members
with a range of skills
and experience.

18
Directors’ statement
Meridian Annual Report 2019
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The roles of Committees
Committees support the Board
by providing detail on specific
issues and having subject matter
experts offer insights and advice.
The Committees, and the Board
as a whole, cover the spectrum
of resources on which we depend
for our business success, and
feed into the company’s overall
strategy and direction. They also
keep the Board well informed of
day-to-day operations.
The Board and Committees also
oversee progress on the UN SDGs
we have chosen to focus on. The
Safety and Sustainability Committee
has responsibility for our progress
on SDG7 (Affordable and Clean
Energy) and SDG13 (Climate Action).
The Board as a whole oversees our
progress as a responsible generator,
particularly as it pertains to the
Waitaki reconsenting process. Our
Remuneration and Human Resources
Committee oversees our efforts to
be a great place to work. Our Audit
and Risk Committee assists the Board
in fulfilling its responsibilities in matters
related to risk management, financial
accounting and reporting.
ResourcesBoard oversight
Financial and manufactured capital
(our cash and assets)
Audit and Risk Committee
TechnologyFull Board
Human capital
— Our people and expertiseRemuneration and Human Resources Committee
— Health and safetySafety and Sustainability Committee
Relationships and reputation

— Our peopleRemuneration and Human Resources Committee
— All other groupsSafety and Sustainability Committee and full Board
Natural resourcesSafety and Sustainability Committee
Significant risks around resourcesAudit and Risk Committee
The role of people and culture
None of our strategic goals, policies
or processes would be achievable
if it weren’t for Meridian’s people,
who are our most important
resource. They work hard to create
value for our shareholders, so it’s
essential that they are aligned
with the company’s strategy and
are well supported and rewarded
appropriately for their efforts.
Our approach to remunerating
our people is on page 77.
The Board has approved a wide
range of policies that Management
are required to adhere to and
incorporate in the company’s
operations, including a Code of
Conduct, the content of which all
employees agree to honour. The
Code provides guidance to staff on
the  behaviours that are expected
and how to handle the issues and
challenges they may face.

19
Directors’ statement
Meridian Annual Report 2019
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Neal Barclay Chief Executive
Guy Waipara General Manager, Generation and Natural Resources
Julian Smith Chief Customer Officer
Nic Kennedy Chief Executive, Flux Federation Limited
Jason Stein General Counsel and Company Secretary
Tania Palmer Chief People Officer
Mike Roan Chief Financial Officer
Ed McManus Chief Executive, Meridian Energy Australia Pty Limited,
Powershop Australia Pty Limited
Our Executive Team
is proud of the record
result achieved this year.

20
Directors’ statement
Meridian Annual Report 2019
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after nearly 10 years with the
company. We thank Paul for his
massive contribution and wish him
all the best for the future.
Nic Kennedy joined Flux as Chief
Executive following the resignation
of Ari Sargent in May. Ari resigned
after 20 years with the Meridian
Group, leading the development of
both Powershop New Zealand and
Flux. Ari, regarded as an industry
renegade, made a significant
contribution to the sector by always
putting the customer first. We thank
him for his many achievements.
Nic was previously Chair of the Flux
board and has a strong background
in business and technology. She is a
valuable addition to the Meridian
Executive team.
Our Chief Customer Officer, Julian
Smith, and our Chief Executive of
Meridian Australia, Ed McManus,
have signalled their intentions to step
down later this year. We thank them
for their enthusiasm and contribution
to our business and wish them both
success in their next endeavours.
Further information
If you are a shareholder, please
feel free to ask questions, request
information or comment on this report
via Meridian’s website or by directly
contacting the Investor Relations
Manager at
investors@meridianenergy.co.nz
Peter Wilson
Our Executive Team
There were changes in the
Executive Team in the second
half of the year.
In June 2019, Tania Palmer joined
as Chief People Officer, following
the resignation of Jacqui Cleland,
General Manager Human Resources
in October 2018. Jacqui played
a significant role in developing
the human resources function at
Meridian in the six years she was
with us and we thank her for her
contribution to the business.
Tania adds further skills to the
team in leadership development
and health and safety from her
previous roles in the energy 
and banking industries.
At the end of April, Mike Roan, who
was in the role of General Manager
Wholesale, was appointed Chief
Financial Officer, responsible for our
finance, strategy and ICT functions.
He replaced Paul Chambers, who
left us to pursue other opportunities
Chris Moller

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Chair and CEO Report
—– The difference
we made this year
This year we’ve successfully
pursued our commercial intentions
and the advancement of our
purpose. We strive for clean energy
for a fairer and healthier world
in ways that align with our social
commitments and the needs of
our customers and shareholders.

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Neal Barclay
Chief Executive
Chris Moller
Chair

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Success driven by principles
Our commercial performance is
driven by principles: the unique
values we hold, the way we work,
our genuine care for our people
and customers, and our staunch
advocacy as a sustainability leader.
Underpinned by our world class
assets, these principles define
and guide every action we take
as a business.
Everything we’ve achieved this year
is a proof point. We’ve put fairness
first, removing prompt payment
discounts which have disadvantaged
vulnerable Kiwi households for
years. We’ve taken climate action –
offsetting our carbon emissions
now and committing to reduce our
emissions in line with a 1.5 degree
warmer world. We’ve made a real
difference in Australia, offering
a carbon-neutral alternative in
a country dominated by fossil-
fuel energy. We’ve leveraged the
value and opportunities of greater
diversity, inclusion and engagement
among our workforce.
These factors point to an organisation
where decision making at all levels
is consistent, purposeful, responsible
and profitable – as demonstrated
by this year’s outstanding
financial results.

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Our purpose:
Clean energy for a fairer and healthier world.
Our strategy:
Champion
the benefits
of competitive
markets.
• Competing vigorously
• Leadership in sustainability
in New Zealand and Australia
• Supporting wholesale liquidity.
Support retail
growth and protect
our generation
legacy.
Demonstrating the contribution
of hydro to New Zealand’s 100%
renewable aspiration, maintaining
a best-in-class generation
portfolio (safety, efficiency and
cost), best-placed renewable
energy pipeline.
Grow overseas
earnings.
• Grow customer numbers
in Australia, maintaining our
vertically integrated position
• Flux global growth.
Grow
New Zealand
retail.
• Simpler systems
• Reduced cost
• Faster adaptation
• Relentless focus on
customer experience
• Deployment of
New Zealand’s most
loved energy brands.
Our values:
Putting customers first.
Sustainability leadership.
Great place to work.
Our behaviours:
Be in the waka.
Be a good human.
Be gutsy.
Our key sustainability goals:
SDG13 Climate Action.
SDG7 Affordable and
Clean Energy.
What drives us

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A bold new identity
The refresh of our Meridian brand
and visual identity, one of our three
retail brands, towards the end of
this financial year is perhaps the
most visible sign of our intention
to make our mark through what
we stand for, what we value, how
we behave and how we perform.
Through the change, we wanted
to present the market a crisper
and bolder articulation of what
we stand for: taking climate action
through generating 100% renewable
energy, made of nothing but
wind, water and sun, while actively
making a difference to people
and the environment.
Our other brands, Powershop in
New Zealand and Powershop in
Australia, continue to grow in both
markets. It’s encouraging, for example,
to see our Powershop Australia brand
making a real name for itself as a
challenger in a market dominated
by much larger companies that
operate predominantly coal-
based generation.
We were also very proud of
Powershop New Zealand who
were awarded Consumer NZ
Energy Retailer of the Year at
the 2019 Deloitte Energy Awards.
The successful migration of thousands 
of our Meridian customers to the
new Flux platform means we are
well on course to deliver exceptional
customer experiences. Our success in
growing our customer base markedly
in both New Zealand and Australia is
significant given the high number of
competitive retail offers, particularly in
Australia, where we have been able to
move into new states and expand our
product offering to include certified-
carbon-neutral reticulated gas.
Supporting retail growth and
protecting our generation legacy
is all part of advancing our purpose
of ‘Clean energy for a fairer and
healthier world’. This year we
undertook important maintenance
work at several of our generation
5 Net Promoter Score (NPS) is a measure
of customer satisfaction.
Putting customers first
Significant increase
in customers
We’ve defied industry trends by
increasing our customer base in
New Zealand by 4% to more than
300,000 customer connections.
Our customer connections in
Australia have increased by
36% to around 132,000.
Outstanding
customer service
This year we maintained our
market-leading performance
in NPS
5
for both the Powershop
and Meridian brands — Powershop
New Zealand the highest in the
industry, Meridian the highest
of the big five retailers.
Flux continues
to grow
There are now over 300,000
customer connections on our
Flux platform globally. We aim
to migrate another 50,000
Meridian customer connections
this year.
sites in accordance with our 20-year
rolling generation asset management
strategy. At the same time, we’re
actively working on our three existing
consents for new generation projects
to get them amended to allow for
larger, more efficient wind turbines
to inject greater wind capacity into
the New Zealand market. Our hope
is that we can start construction of
our project to the north of Napier at
the beginning of 2020, subject to
final Meridian Board approval.
123

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Health and safety
No members of public were seriously
injured at any of our sites this year,
however five staff members and
three contractors received injuries
that required time off work. Another
contractor sustained an injury on
one of our sites in July this year,
also requiring time off work.
Three of these incidents were
significant. Whilst we’re not happy
with this level of performance, we’re
confident that the business hasn’t
taken a step backwards either
culturally, or in our systems and
processes. We are currently taking
a fresh look at our approach to
understand whether there is a
root cause behind these incidents.
In addition to our people’s physical
safety, we continue to focus on
mental health and wellbeing. Our
Healthy Minds Programme, featuring
Mike King, has been well received
with a third of our staff reaching
out for further support following the
sessions run by Mike. We consider
this a sign of the stresses most
of us are under in society today,
and it is encouraging that people
are more open to improving their
mental wellbeing.
Engagement remains steady
Our annual Meridian Group
engagement survey took place
during the first two weeks of May.
Overall our employee engagement
results for the year are steady,
showing that we have continued to
take our people with us through a
busy and, at times, challenging year.
While there was a mix of upward
and downward trends in individual
business units, participation rates
continued to be extremely high
at over 90%, with our overall
engagement score of 77% down
just one point from 78% in 2018.
This result is positive against a
range of external benchmarks,
and positions us close to the 78%
overall engagement score achieved
by the top 25% of all global survey
participants (we use the Culture
Amp tool).

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Sustainable business
We continue to hold the view
that sustainable businesses will
be the most successful businesses
over time. We want to make a
meaningful contribution to both
human impact on the planet
and a more equitable society.
As we noted last year, our business
plays an essential role within
New Zealand society and we know
that it is through creating value for
others that we create value for our
organisation. In addition to our
efforts on creating a great place
to work and being a responsible
generator, we have again this year
focused on sustainability, aligning
our efforts with UN SDG13 Climate
Action and SDG7 Affordable and
Clean Energy.
Prompt Payment Discount
In alignment with our commitment
to keeping energy affordable and
protecting vulnerable customers,
we became the first major energy
retailer to stop using Prompt Payment
Discounts which impacts those who
most struggle to pay their bill and,
instead, replacing it with new
lower rates.
Sustainable businesses
will be the most successful
businesses over time.
A real need for climate action
There’s a deepening sense amongst
many of us that things can’t go
on as they are – this year has seen
school students go on strike in
the name of climate action, and a
new Intergovernmental Panel on
Climate Change (IPCC) assessment
of what global warming of 1.5
o
C
will actually mean.

6 Emissions from our electricity purchased and on
sold calculated using market-based methodologies.
In New Zealand we use the annual netting off
methodology. In Australia we use the National
Carbon Offset Standard (NCOS) administered by
the Australian government.
7 Offsets include credits surrendered to the
New Zealand government for SF6 gas, credits
cancelled by suppliers against their own emissions,
credits purchased by Powershop Australia as part
of NCOS, and Gold Standard Voluntary Emissions
Reductions (GS VERs)
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Our most significant climate action is
our commitment to 100% renewable
energy generation, both here and in
Australia. This is our commitment in
our own business, but also a long-
term aspiration for the electricity
systems we are a part of.
As we work together as an industry
to reach that goal, there is a
valuable and necessary contribution
renewable electricity can make to
the decarbonisation of the rest of
the economy – in both transport
and industrial heat. Our ambition
is to accelerate the pace of this
transition, for example, by supporting
the uptake of electric vehicles,
providing leadership for other
businesses to do the same. Our efforts
were recognised at the 2019 Deloitte
Energy Awards where we won the
Low Carbon Future Award.
At Meridian, we’re motivated to be
part of the solution. At the same
time we recognise that change
must be managed justly. Our people,
our customers, our investors and
communities are all groups who
must be supported through the
upcoming transition.
We will halve our operational
emissions by 2030.
As of the release of this report, we are
now net Zero Carbon for our Group
operational emissions through the
purchase of certified carbon offsets.
And we’ve started work on our forestry
project to grow our own carbon offsets
in the medium- to long-term.
Meridian Group greenhouse gas emissions FY19
tCO
2
eEmissionsOffsets
7
Balance after offsetting
Scope 11,0991,099–
Scope 22,3182,318–
Scope 3 operational33,56633,566–
Total Group operational emissions36,98336,983–
Scope 3 energy purchased and onsold
6
New Zealand electricity––
Australian electricity and gas 611,822611,822–
Scope 3 one-time construction and upgrades68–68
Total Group value chain emissions648,873648,80568
But we wanted to go a step further,
so we’ve also set a meaningful and
significant reduction target of “Half
by 2030” — halving our operational
greenhouse gas emissions across
the Group — which will reduce the
amount we offset in future years.
This won’t be easy given our
ambitious plans for growth in our
Australian business and with Flux
globally, but we know it is the right
thing to do, and it brings us into
alignment with a 1.5 degree
warmer world.
An increasing appetite to decarbonise
the economy will challenge businesses
to think more deeply about how
they mitigate their environmental
impacts, both directly and within
their dispersed supply chains. Almost
certainly the work of the Taskforce on
Climate-related Financial Disclosures
(TCFD) will see the calls for voluntary
climate-related financial disclosures
become louder, especially for publicly
traded companies.
We are very proud to be the
first company in Aotearoa to
publish a report using the TCFD’s
recommendations and we look
forward to other companies analysing
and disclosing their risks and
opportunities, so investors can make
sound decisions in light of the climate
challenge we are facing globally.

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100%
Renewable
Wind. Water. Sun.
We’re a 100% renewable
energy generator.
1,000haOffsetting
Planting 1,000ha of forest
to grow our own offsets
FY18 offset
Scopes 1 and 2
FY19 offsetting our operational
value chain (Scopes 1, 2 and 3)
Working
Together
We’re engaging
our suppliers
Supplier Code
of Conduct
Workshops
for our staff
Incorporating
sustainable
design and
procurement
into our large
projects
Encouraging
suppliers to set
science-based
targets
Understanding
Climate Change
We’ve done the work to analyse how
climate change affects our business
and we’re happy to share
Reducing Impact
Creating Action
We want to accelerate the pace of change
in the systems we’re a part of
Electrification of transport
Electrification of industrial heat
The goal for renewable
electricity in New Zealand
Increasing renewable
electricity in Australia
100%
Our reduction goal
is half by 2030
Measuring and auditing
our carbon footprint
since 2006
Investigating an
electric boat and
other big ideas
Menu
Our climate action plan

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During the year the New Zealand
wholesale electricity market
saw periods of sustained higher
spot prices in response to supply
interruptions from the country’s
largest offshore gas field.
This gas scarcity coincided with
periods of low national hydro inflows
and some thermal generation plant
outages. Meridian maintained relatively
good hydro storage through these
periods and as a result New Zealand
generation spot revenue was 61%
higher than last year. While higher
spot prices meant Meridian paid
57% more to supply its New Zealand
customers, higher sales to those
customers, the higher generation
revenue, prudent market hedging
and a 45% uplift in the contribution
from our Australian business helped
achieve  a record EBITDAF result in 
FY19, 26% above FY18.
Despite a reduction to profit from
the net fair value of financial
instruments, and increases in
depreciation, amortisation, interest
costs and tax expense, the higher
EBITDAF in FY19 translated into
higher NPAT (+69%) and higher
underlying NPAT (+62%).

Healthy total return to
shareholders (TSR)
Total dividends paid during the
year amounted to 19.52 cents per
share. Combined with the 52%
increase in the share price during
FY19,  this amounts to a TSR of 59%
in the year to 30 June 2019. Low
interest rates continue to provide
good support for the share prices
of New Zealand electricity stocks,
including Meridian. This is also
reflected in the wider share market,
where the yield characteristics of
New Zealand utility and property
companies have helped support a
17% increase in the NZX 50 index
in the year to June 2019.


NZ Energy MarginEBITDAFTotal DividendShare Price
17%26%11%52%
UpUpUpUp
MyShare scheme
50% of Meridian parent permanent
employees now own shares in the
company. Employees still at the
company holding FY17 shares have
this year been awarded extra shares
under the terms of the scheme.
Our best financial result yet

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EBITDAFNet profit after tax (NPAT)Underlying NPAT
Cash flow from operating activities
Five-Year Performance
Financial Year Ended 30 June
$MFY15FY16FY17FY18FY19$MFY15FY16FY17FY18FY19$MFY15FY16FY17FY18FY19
400
300
200
100
0
400
300
200
100
0
1,000
800
600
400
200
0
618
650
657
666
247
185
200201
339
209
233
221
206
333
$MFY15FY16FY17FY18FY19
700
600
500
400
300
200
100
0
440
452
470
427
635
Value for our shareholders
838
Dividends declared
Ordinary dividends
Special dividends
Total
CPSFY15FY16FY17FY18FY19
25
20
15
10
5
0
12.88
5.35 18.23
13.50
4.88 18.38
14.03
4.88 18.91
14.32
4.88 19. 20
16.42
4.88 21.30
Total shareholder return
Meridian
Peer group median
%FY15FY16FY17FY18FY19
60
50
40
30
20
10
0
33%
31%
17%
14%
59%

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The record level of EBITDAF in FY19
supported a similarly high level of free
cash flow. The Board has declared a
final ordinary dividend of 10.72 cents
per share, 20% higher than last year.
This brings total ordinary dividends
declared in FY19 to 16.42 cents per
share, 15% higher than last year and
represents a 75% payout of FY19
free cash flow.
Meridian has also declared a final
special dividend of 2.44 cents
per share ($62.5 million) under
the company’s existing capital
management programme to return
$825 million to shareholders over
the seven year period to February
2022. This final special dividend
brings the capital management
special dividend declared in FY19
to 4.88 cents per share, with $562.5
million now distributed since the
capital management programme
commenced in August 2015.

The Board has declared total
dividends in FY19 of 21.30 cents
per share, 11% higher than FY18.

Dividend declared
(cents per share)
Ordinary
dividends
Capital
management
special dividends
Other special
dividendsTotal
201916.424.8821.30
201814.324.8819. 20
201714.034.8818.91
201613.504.8818.38
201512.882.442.9118.23
Dividends for the financial year ended 30 JuneNet debt/EBITDAF
Financial year ended 30 June
20152016201720182019
2.5
2.0
1.5
1.0
0.5
0.0
1.7
1.8
1.9
2.3
1.7
Times
In February 2019, our third United
States Private Placement (USPP)
transaction raised US$300 million in
long term funding across 10, 12 and
15-year maturities. The placement
was settled in April. We received
circa NZ$439 million which was
used to refinance an existing USPP
maturity and for general corporate
purposes. Meridian’s balance sheet
remains in a strong position, with the
company credit metrics well within
the bounds used by rating agency
Standard & Poor’s.
Regulatory outlook
There is lot going on in the regulatory
world at the moment. While we are
of the opinion that the New Zealand
electricity market is on the whole well
designed, where consumers have
genuine choice, there are always
improvements that could be made.
The Electricity Price Review has been
positive to date. We are broadly
supportive of draft recommendations
that seek to enhance the market’s
efficiency and competitiveness, while
keeping a focus on affordability and
fairness. We note that in response
to this review, and the recent Interim
Climate Change Committee (ICCC)
report, the Minister of Energy and
Resources is looking to develop
strategies on renewable energy
and RMA reform that will help
increase the amount of renewable
electricity produced.
It is great to see this recognition
of the role New Zealand’s high
level of renewable electricity can
play in decarbonising the rest of
the economy and this presents
an exciting opportunity for the
years ahead. We also are keeping
a keen eye on the review of the
Transmission Pricing Methodology –
we continue to believe that reforms
will significantly benefit consumers.

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We end the year in good heart
The 2020 financial year will
no doubt throw up some
challenges and opportunities,
but we approach the year
from a position of strength.
Our water position is good
thanks to plenty of rainfall in
the second half of the year.
And we have strong momentum
on both sides of the Tasman
in our customer businesses.
On behalf of the Board and
the Executive Team, a sincere
thank you to our shareholders,
our customers, communities
and partners; and lastly, to
the Meridian teams who have
delivered you a company to be
proud of, and an outstanding
financial result.
Chris Moller
Neal Barclay

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Helping our customers make a difference now
Helping
our
customers
make a
difference
now

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The difference
we made this year
Our customers are on the journey
with us. We offer them opportunities
to make choices about their power
providers that they feel good
about. That’s a key reason for their
choosing us: they want to know they
are part of something meaningful,
that climate action is happening now.

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Helping our customers make a difference now
276,446
48,208
274,920
7 7,970
276,767
100,524
290,756
302,277
100,545
109,804
10
5,967
167
5,969
345
5,727
493
5,981
549
6,240
553
Meridian res, agri, small and medium business
Meridian corporate
Powershop
Customer connections
8
(ICPs
9
)
350
300
250
200
150
100
50
0
000’s
Customer sales volume
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
GWHNZAUNZAUNZAUNZAUNZAU
FY15FY16FY17FY18FY19
NZAUNZAUNZAUNZAUNZAU
FY15FY16FY17FY18FY19
Retail success is all about focusing
on the things our customers tell us
they value and delivering them in
the most efficient ways possible.
We want to help grow New Zealand
retail through simpler systems,
reduced costs, faster adaptation
and a relentless focus on creating
an easy customer experience. Our
key project to improve our Meridian
customer experience is driven by
the transition of our customers
to the Flux Federation software
platform alongside offering market-
leading customer experiences
and engagement.
For Meridian and Powershop
Australia, we want to be chosen for
our leadership in sustainability. For
Powershop in New Zealand, we offer
control with an irreverent sense of
humour. And across all our operations
we want to contribute to smooth and
efficient markets that work within the
frameworks set by our regulators.
74,422
21,705
206,150
779
2,338
3,123
8 Excludes the Tiwai Point Aluminium Smelter; <10 of the above ICPs are connected
to the transmission network; Around 4,700 customer connections have distributed
generation metering .
9 Installation control points (ICPs).
10 Also 22,612 gas customer connections in Australia, with a total of 364TJ in volume.

11 International Energy Electricity Information 2018
shows New Zealand household electricity costs
at 194.97 US dollars per megawatt hour (USD/
MWh) (converted with purchasing power parity).
The mathematical average is 244.66 USD/MWh for
the OECD countries for which data was available.
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Competition works for consumers
There is intense competition in
the retail market. New Zealand’s
residential electricity prices are
around 20% lower than the OECD 
average
11
, and these lower prices have
been achieved despite New Zealand’s
low population density and relatively
high network costs (due to our
geography), and a lack of subsidies.
Part of what keeps prices low
in New Zealand is competitor
behaviour, but this also represents
a key risk to Meridian’s business.
Aggressive pricing campaigns
and the entry of new competitors
may put downward pressure on
retail electricity prices and reduce
Meridian’s market share, or require
Meridian to increase its sales
and marketing costs to maintain
sales volumes.

Bill breakdown
32%
generation
34%
generation
39%
generation
10.5%
transmission
13%
GST
13%
GST
27%
distribution
40%
distribution
and transmission
32%
distribution
and transmission
13%
retail
8.5%
retail
15%
retail
9%
GST
3.5%
metering
3.5%
metering
4%
metering
1%
market
governance
1%
market
governance
1%
market
governance
Meridian
Powershop New Zealand
Powershop Australia
As you can see from the bill breakdown,
about 75% of the price of power is from
generation, transmission, distribution
and metering (creating the power
and getting it to the customer).
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Helping our customers make a difference now

13 Electricity Price Review Hikohiko Te Uira
First Report 30 August 2018, page 4.
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Just as consumer behaviour can
shape how we and our competitors
act, so our behaviour and that of
our competitors can be affected by
changes in customer behaviour.
Such changes can include reductions
in demand (for example, a reduction
in consumption by the Tiwai Point
aluminium smelter), the displacement
of demand by technology change,
and large business customers
choosing to buy electricity directly
on the wholesale spot market
rather than enter fixed contracts.
High customer switching levels affect
the cost of acquiring and maintaining
Meridian’s customer base, and they
are a good reminder that both
Switching rates
12
FY17FY18FY19
Powershop New Zealand33.9%33.7%29.6%
Meridian 19.1%17.9 %16.9%
New Zealand combined22.3%21.4%19.9%
New Zealand industry average20.4%21.0%20.5%
Australia and New Zealand have
very competitive markets where
keeping customers is challenging.
Since 2011 in New Zealand there
has been no real price increase
for consumers arising from the
competitive parts of the electricity
supply chain (generation and retail).
Meridian’s switching rate in the past
12 months has continued to drop.
This year it was 16.9% (down from
17.9% last year), which is the lowest
among the major electricity retailers.
Switching rates for Powershop in both
New Zealand and Australia remain
higher, but Meridian and Powershop
New Zealand’s combined switching
rate of 19.9% (down from 21.4% last
year) is now lower than the industry
average of 20.5%.
Changing our pricing structure
Despite the high level of competition
creating positive price outcomes
for New Zealand and Australian
customers, past research has
revealed that around 103,000
New Zealand households spent
more than 10% of their incomes
on their household energy bills
13
.
There are multiple reasons for
this. We know that people with
low incomes are more likely than
others to live in housing that is not
energy efficient or well insulated,
meaning they often need more
power to stay warm. These homes
are also linked with higher rates
of respiratory and other illnesses,
which in turn affects health, energy
levels, mobility and income.
12 Data from the Electricity Authority (emi.ea.govt.nz)
and Meridian analysis. Switching rates are not
published by the market operator in Australia.

40
Meridian Annual Report 2019
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Helping our customers make a difference now
This year we have restructured
our rates and replaced the Prompt
Payment Discount. Instead we are
now offering a new lower rate for
all our customers. We view prompt
payment discounts as unfair to
customers who struggle to pay their
energy bills from time to time. Our
new lower rates ensure that everyone
gets the same benefit without being
hurt if they’re late on their payment
dates. The Government’s Electricity
Price Review panel found that
vulnerable households were
disproportionately affected by
not receiving their Prompt Payment
Discount and that the discount was
the biggest single cause of price
disparities between vulnerable
and non-vulnerable households.
This gave us comfort that we had
made the right move in committing
to removing the Prompt Payment
Discount shortly before the panel’s
findings were announced.
Part of being a great provider
of electricity is making sure that
our most vulnerable customers
are treated fairly.

41
Helping our customers make a difference now
Meridian Annual Report 2019
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New Zealand disconnections
14
Meridian
Powershop NZ
Total market
0.4
0.3
0.3
FY15
0.2
0.2
0.3
FY16
0.1
0.2
0.3
FY17FY18
0.1
0.3
0.4
0.1
0.2
0.5
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
%FY19
So far, Meridian is the first – and
only – major energy retailer to
replace the Prompt Payment Discount
with a lower overall pricing structure.
The initiative is expected to cost us
$5 million per year. We look forward
to other retailers following suit.
The company also has a number
of ways of assisting low-income
households to pay their power bills,
including tailored payment plans,
a LevelPay product that keeps monthly
bills the same throughout the year,
and options to pay for power weekly,
fortnightly or monthly. Meridian’s
customer disconnection rates are
among the lowest in our industry. We
employ a Hardship Consultant to help
customers in difficulty manage their
current and future bills. We also work
with government support agencies
such as Work and Income.

Another initiative, which we were
involved with from the start, is
EnergyMate, a free in-home coaching
service by the Electricity Retailers’
Association of New Zealand (ERANZ),
that involves a number of electricity
retailers, lines companies, community
organisations and the Government.
It’s being trialled with 150 families. The
coaches support families at highest risk
of energy hardship by helping them
talk to their retailers (about payment
plans, the right pricing plans, etc),
doing high-level assessments of how
warm and healthy their homes are,
and working with them to access
services like curtain banks or talk to
their landlords about insulation.
Concern for affordability is also
why we strongly support distribution
pricing reform. Currently distribution
or network charges are not reflective
of the actual costs of supplying
consumers. This can result in poorer
customers paying more than
their fair share of network costs.
A particularly unfair example is the
Low Fixed Charge (LFC) regulations.
These cap the fixed charge that
households on low user plans pay
to around $9 a month but require
those households in return to pay a
higher variable or per-kilowatt-hour
charge. The regulations assume
poorer households are able to use
less power, but many have high
electricity use for a wide range of
reasons that are outside their control –
poorly insulated homes, illness, being
14 Data from the Electricity Authority
(emi.ea.govt.nz/Datasets/Retail/Disconnections).
FY19 only includes three quarters of data.
at home during the day, or having
many family members under the
same roof. These households
are actively disadvantaged by
the LFC model, and can end up
spending a significant portion of
their household incomes on their
power bills. Most concerningly
they are cross-subsidising many
high-income households who are
comfortably able to reduce power
usage and take advantage of LFC
rates by having modern homes with
good insulation, the latest energy
efficient appliances and alternative
sources of heating besides electricity.
If network charges were more
reflective of actual costs, it would
help ensure that all consumers paid
their fair share.

42
Helping our customers make a difference now
Meridian Annual Report 2019
Menu
Our three brands meet
different customer needs
With three distinctive and well-
established customer brands
in two markets, we offer our
customers choice and options
that appeal to different
emotional and rational drivers.
Despite the intense competition
(as at 30 June 2019 there were
40 retail brands in New Zealand
and 33 retailers Australia), we
are growing in both markets.
Our New Zealand retail customer
growth this year bucked the trend
of the other large retailers. We
continued to grow our customer
base, up 4% from last year – mostly
as a result of gains by Powershop,
which reached 74,400 customer
connections by 30 June 2019. At
year end the Group passed the
300,000 customer connections
threshold in New Zealand for the
first time. We also enjoyed strong
customer growth in Australia,
supported by the introduction of
our certified-carbon-neutral
household gas product.

Our Meridian brand serves customers
who are looking for a renewable
energy generator that cares deeply
about the environment and the
people of New Zealand. Around
one-fifth of Meridian customers
deliberately choose our brand in
alignment with their environmental
values. They are part of a growing
group of conscientious consumers
who filter their brand choices
based on the contribution they
perceive brands are making to
future generations.
Our Powershop brand in New Zealand
suits consumers who want to have
control over their energy usage
and cost, in a fun, irreverent and
engaging way.
In Australia, our Powershop Australia
brand focuses on sustainability,
offering a deliberate contrast to the
country’s high reliance on coal and
lack of clarity on environmental policy.
While our Australian business still
represents less than 10% of our Group
annual revenue and is a relatively
small player in that market overall,
it continues to grow rapidly as more
and more Australian consumers look
for cleaner options.
This year, Powershop Australia entered
into an arrangement to provide retail
services on a white-label basis to DC
Power Co, a solar-focused energy
retailer. We provide their customers
with their energy and all retail-related
services. DC Power Co targets the
residential solar market specifically, and
provides a range of additional services
on top. In June, Powershop Australia
also signed a white-label agreement
with Kogan to launch Kogan Energy
before the end of the calendar year.
It will be a mass market offering with
a digital and low cost approach.
We launched a carbon-neutral
retail gas product in Victoria, Australia
at the beginning of this financial year.
That product has been well received.
We now have 22,000 customer
connections, with customers who were
either electricity customers and added
gas, or new customers who signed
up for dual fuel. Managing gas risk
is new for us, but we’ve been able to
secure long-term contracts for supply
and use a range of mechanisms to
manage the wholesale price risk.
Flux will help us deliver
better customer experiences
As customer expectations around
experiences rise, we recognise that
improving what we offer is vital
to differentiating ourselves from
others in a very crowded market.
We want the people who buy from
us to be able to engage with us
easily, on their terms and through the
communication channels they prefer.
This year we continued to transition
our Meridian customers to the
Flux Federation software platform
(year two of a $30 million three-
year programme). Both Powershop
brands are already using this
software, so alignment of our
customer experience technology
will improve the experiences we
offer all our customers, allowing
us to respond to customers’ needs,
deliver products to market faster and
lower our overall cost to serve. The
transformation of our retail business is
tracking well. By the end of the 2019
calendar year, up to 50,000 Meridian
customer connections will be on our
Flux platform.

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Meridian Annual Report 2019
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Helping our customers make a difference now
People are the critical component
Just as Flux depends on people
with software design and
development talent to develop the
platform needed for our ambitious
transformation programme, our
ability to offer competitive customer
service and experience is strongly
linked to our ability to be an
employer of choice. We continue
to develop our call centre, sales
and account management staff to
meet the needs of our customers
and resolve issues in areas ranging
from energy efficiency to pricing.
The transformation of Meridian’s
ICT infrastructure to better align with
Flux is much more than a change
in technology. It is also driving a
change of culture and approach, as
we evolve the wider business to more
agile ways of working. We’re seeing
teams take greater responsibility
for solving problems. We’re also
seeing projects deliberately reduce
in scope, particularly those that are
of low value to our customers. There
are changes also in the customer
team, where functions that we once
would have considered ‘back office’
have been shifted to the purview of
Our ability to offer competitive
customer service and experience
is strongly linked to our ability
to be an employer of choice.
our frontline teams, allowing people
dealing with customers to solve their
problems much more quickly. That
shift has seen us support our people
in these frontline roles to focus on
their empathy and problem-solving
capabilities.
Looking ahead, meeting our
customers’ and stakeholders’
expectations will require diversified
teams made up of people who are
motivated, well equipped, highly
skilled and empowered to help
us perform.

Encouraging
openness and diversity
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Meridian Annual Report 2019
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Helping our customers make a difference now
Meridian’s diversity and
inclusion programme
centres on four key pillars,
each led by a member of
the Executive Team who is
accountable for ensuring
the goals are achieved:
Gender.

To increase the number of
women in people leadership
and senior specialist positions
below Executive Team level to
40% by the end of 2020.
Ethnicity.

To increase ethnic diversity
across the workforce to be
more representative of the
New Zealand population
and build cultural awareness.
Inclusion.

To be the most inclusive
company in New Zealand,
to allow our people to bring
their whole selves to work.
Flexibility.

To enhance workplace
flexibility as and where
appropriate.

45
Meridian Annual Report 2019
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Helping our customers make a difference now
Female

Male
Diversity by gender (headcount) for the group
Under 30
30–50

Over 50
Diversity by age (headcount)
Board
Executive Team
Corporate centre
ICT
Generation and

natural resources
15
The customer team
Powershop NZ
Australia
Flux Federation NZ
16
Wholesale
0%0%
100%
0%
56%
44%
22%
63%
15%
6%
71%
23%
17%
47%
36%
16%
55%
29%
31%
53%
16%
56%
41%
3%
27%
70%
3%
26%
60%
14%
150
125
100
75
50
25
0
37%
63%
Flux Federation NZ
16
300
250
200
150
100
50
0
Australia
26%
74%
Powershop NZ
60%
40%
The customer team
62%
38%
Generation and

natural resources
15
22%
78%
ICT
37%
63%
Corporate centre
69%
31%
Wholesale
29%
71%
22%
78%
Executive Team
Board
29%
71%
Group % ratio female salary to male salary
By salary band
17
FY18FY19
K–L93.0%91.5%
I–J97. 4%98.1%
G–H99.1%95.4%
E–F96.1%99. 2%
C–D103.9% 105.9%
A–B100.4%100.3%
Average of average98.3%98.4%
17 K & L are our highest salary bands and A & B are our lowest.
Overall
45% female
We’re committed to pay equity for
all employees in similarly sized roles,
with similar skills, experience and
accountabilities, but the average salary
across the organisation for men is
higher than the average salary for
women because there are still more
men than women at senior levels.
15 Includes Dam Safety and Intelligence.
16 Includes Flux UK staff.

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Meridian Annual Report 2019
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Helping our customers make a difference now
A more balanced approach
Pay equity has been a focus for
Meridian since 2013 when a review
highlighted that gender imbalance at
senior levels was making the biggest
difference to pay inequality.
We have embedded a transparent
culture around pay equity from the
Board to every manager. This year
we won the Progressive Organisation
award at the YWCA Equal Pay Awards
for our continued commitment
to equal pay as part of our overall
commitment to being an employer
of choice in New Zealand. We were
also awarded the 2018 YWCA Equal
Pay Compact for our initiatives
and focus on equal pay. We also
achieved the Gender Tick, a unique
New Zealand-based accreditation
programme for businesses to
demonstrate their commitment
to gender equity in the workplace.
Meridian is one of just seven
organisations to achieve this so far.
Percentage of women by salary band
18
FY18FY19
K–L16.7%18.5%
I–J28.6% 27.1%
G–H31.2% 30.8%
E–F43.7% 43.2%
C–D54.7% 49.7%
A–B65.4% 72.2%
18 K & L are our highest salary bands and A & B are our lowest.
Female representation (%) FY18FY19
Female share of total workforce 41.8%45.3%
Females on the Board 25.0%28.6%
Females in management positions
(as % of total management workforce)
33.6%37. 2 %
Females in junior management positions, i.e. first level of
management (as % of total junior management positions)
36.3%40.8%
Females in top management positions, i.e. maximum
two levels away from the Chief Executive or comparable positions
(as a % of total top management positions)
30.7%33.6%
Females in management positions in revenue-generating
functions (e.g. sales) as a % of all such managers
(i.e. excluding support functions such as HR, IT, legal, etc.)
29.4%33.7%
Percentage of women in senior roles at 30 June
19
FY17FY18FY19
32.8%33.5%35.2%
19 Parent company only, women in people leadership
and senior specialist roles, below Executive Team level.
In all ways we try to incorporate
fairness into our remuneration
approach – as a minimum,
Meridian pays the Living Wage
for all permanent employees
in New Zealand.
Gender and age balances are still
a work in progress. We are making
good inroads in recruiting young
women to work in traditionally
male-dominated areas like
generation, but we know this will
take time because of low staff
turnover. Women are also under-
represented in leadership and
senior-level roles throughout the
business, and we have an ongoing
focus on addressing this.
We currently have 35.2% women
in people leadership and senior
specialist positions below Executive
Team level against a target of 40%
by 30 June 2020.

47
Helping our customers make a difference now
Meridian Annual Report 2019
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Helping people to feel included
Part of getting our skills mix right
is making sure we incorporate
different viewpoints, backgrounds
and languages into our culture.
We want our make-up as a business
to reflect the markets we compete in
and the changing ethnic make-up
of our countries.
In Aotearoa, we continue to train
our Meridian people in tikanga
and proper pronunciation of te reo
because protocol and language
are key expressions of respect.
We also encourage our people to
explore the many other cultures
that are part of our workforce.
Cultural openness is part of a wider
initiative to encourage tolerance
and inclusion, to encourage people
to mix their skills with others' and to
engage in design thinking to solve
problems. Our intention is to widen
our problem-solving capabilities to
resolve complex situations.
This year we undertook our first
diversity and inclusion survey
since 2015. Participation rates
were up significantly, with 61%
of our people completing the
survey. Our commitment to
diversity and inclusion seems to
be making a positive contribution
to our workplace, with our people
especially positive about Meridian
building diverse teams, and feeling
that their opinions are valued.
We won the Diversity & Inclusion
Award at the 2019 NZ HR Awards
for the work we are doing in all
aspects of diversity and inclusion.
We also won the HR Specialist Award.

In May, as part of signalling our
commitment to diversity and
inclusion publicly, we took part in
the  2019 Wellington International
Pride Parade. Our participation in
this colourful celebration is part
of what we do to bring to life the
Rainbow Tick Meridian received
last year, recognising our support
for the LGBT+ community both within
and beyond our organisation.
Committed to a more
flexible workplace
We have been building greater
flexibility into our working style
across the whole business for some
time, recognising that we need to
provide a work environment and
conditions that encourage and
reward people to work to their best.
As an example, in February this year,
at our Manapōuri power station in
West Arm on Lake Manapōuri, we
began trialling a nine-day-fortnight
roster. The station is only accessible
by boat, meaning the team’s daily
work programme is dictated by two
scheduled 45-minute sailings. The
nature of the work also means they
need to be physically present on site.
For the trial, we scheduled longer
working days to fit ten days into nine,
giving all team members an extra day
off each fortnight. The trial was not
without its operational challenges,
but in addition to the benefits to
our people, the change to the boat
schedule could save us more than
60,000 litres of fuel per year.
Increased costs
Alongside supporting our people
to feel included and to do their
best work, we want to make sure
we always have the right people
in the right roles to deliver the
right outcomes.
We maintain a strong focus on
managing headcount, and fill roles
from within the business where we
can to meet the changing needs
of the business rather than simply
increasing staff numbers. However,
we’re also not afraid to invest where
we need to in order for the business
to flourish. Employee and other
operating costs were $282 million
in FY19, $23 million (9%) higher than
last year, reflecting an ongoing
investment to support expansion
of the Powershop Australia (including
a retail gas offering) and Flux
businesses, and continued customer
acquisition pressure in the highly
competitive New Zealand market.
Costs also include refurbishment work
that Meridian has been undertaking at
the Ōhau hydro stations and Te Āpiti
wind farm.

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Helping our customers make a difference now
Meridian Annual Report 2019
Menu
Enduring partnerships
Proof for our customers and our
staff that we are a company worth
choosing comes in part through
the social and environmental
partnerships we support.
View KidsCan
View Kākāpō Recovery
Our relationships with KidsCan and
the Kākāpō Recovery Programme
(this year we committed to an
additional three years of funding)
are an important way of showing
we are a trustworthy company
that takes meaningful actions to
enhance our environmental and
social responsibility credentials, as
are our Power Up community funds
(see page 69). Other sponsorships
include Meridian’s support for South
Island Rowing, and Powershop
New Zealand's support of the life-
saving work of the Neonatal Trust.
And in Australia our key partnerships
are with Museums Victoria and the
Sydney Gay and Lesbian Mardi Gras.
Customer satisfaction — Net Promoter Score (NPS)
20
FY17FY18FY19
Powershop Australia
21
455353
Australian industry average
22
(14)(18)
Powershop New Zealand485551
Meridian 1624
New Zealand industry average
22
1418
Better understanding our customers
Identifying the customer segments
that are most valuable to our
business, and building a deeper
understanding of their needs, are
goals for both our customer service
technology projects with Flux and
the training we invest in for our
sales staff.
Our marketing strategies also play
their part, enabling us to use the
data we collect to better understand
the priorities and triggers for each
group. We use integrated marketing
campaigns to grow general brand
awareness, and marketing and sales
campaigns to reach prospective
customers through a variety of
channels and partnerships (an
investment of $12.8 million across
the Group in FY19). Three-quarters
of Meridian customers receive
communications via email and
around a third use our online portal.
Our Powershop businesses rely heavily
on digital channels, communicating
with customers largely through email
and the Powershop mobile app.
To help us assess our relationship with
our customers, the Meridian Group
uses the Net Promoter Score (NPS). All
three brands continue to score much
higher than the industry average in
their respective markets, reflecting
the hard work we put in to excellent
customer experiences and fair pricing.
20 Calculated from a survey asking customers using a 0–10 scale “How likely is it that you
would recommend Meridian/Powershop to a friend or colleague?” and then subtracting
the percentage of detractors from the percentage of promoters. A positive value
indicates that more customers are promoters versus detractors (and vice versa).
21 FY17 data not a full year.
22 Perceptive Group Limited: New Zealand & Australia NPS Industry Benchmarks.

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Helping our customers make a difference now
Meridian Annual Report 2019
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Growing Flux’s customer base
The ongoing success of our businesses
beyond New Zealand aligns with our
intention to grow overseas earnings
through expansion of our Powershop
challenger brand in the Australian
market and the ongoing expansion
of Flux Federation’s portfolio
of customers.
Flux has now been operating as a
separate Meridian entity for more
than two years, successfully scaling
its development capability to improve
functionality for our brands and for
nPower in the UK (which retails the
Powershop brand under licence).
New people and teams have seen
Flux Federation grow to around
160 software developers, designers,
testers and product experts,
making them one of the biggest
of the Wellington-headquartered
software development teams.

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A different tomorrow
Meridian Annual Report 2019
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A different tomorrow
The New Zealand and Australian
markets have very different
characteristics. The New Zealand
market revolves around water
and wind. The Australian market
in contrast depends on fossil fuels.
These characteristics influence how
we do business in each country.

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Meridian Annual Report 2019
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Working with regulators
Changes to public policy that lead to
changes to legislation or regulation
in either New Zealand or Australia
(including electricity regulation,
changes in policies to support
renewable energy, and new or
changed environmental regulations)
have the potential to affect our
business significantly.
Such changes could adversely
affect our sales, costs, relative
competitive position, development
initiatives or other aspects of
our financial and operational
performance, or force undesired
changes to our business model.
Regulators in both New Zealand
and Australia are focused on
supporting open, fair and efficient
markets. As a key member of the
energy sector, we have a responsibility
as a good corporate citizen to
advocate for a market environment
and a wider regulatory environment
that are conducive to achieving our
commercial and sustainability goals.
We are committed
to affordable energy
As part of that, we champion the
benefits of competitive markets
through competing vigorously,
leading in sustainability in
New Zealand and Australia, and
supporting wholesale liquidity.
We advocate for value for our
New Zealand customers through
our membership of ERANZ, and
we engage with both regulators
and government agencies through
regular meetings and submissions.
This year in particular we have
engaged in the Electricity Price
Review process. This has provided us
with an opportunity to make further
improvements to a market that is
already one of the most efficient
and effective in the world. We’d like
to congratulate the Electricity Price
Review Panel on the work they have
done in assessing the state of the
electricity sector in New Zealand.
We have supported this review for
some time because we believe that
the New Zealand electricity market
is for the most part delivering fair,
efficient, reliable and sustainable
outcomes for New Zealand consumers.
The panel delivered a final report to
the Minister of Energy and Resources
at the end of May this year, with 32
recommendations. We look forward
to the release of the report. Delivering
on the recommendations is likely to
be a significant workload and we are
pleased with the panel’s indication
that the recommendations will be
prioritised so that the sector knows
where to focus.
Other reforms could be considered
But as we pointed out in last year’s
report, we believe that distribution
pricing reform should be accelerated
to encourage appropriate investment
in new technologies such as rooftop
solar and electric vehicles and to
avoid the risk that those who can
least afford them end up paying for
more than their share.
Also, in looking to remedy wider
social and affordability issues, we
believe the Government, and those
reviewing the industry on its behalf,
need to tread carefully to ensure that
competition and the investments
required to maintain security of supply
are not compromised or impeded.
As the owner of long-term assets,
we value the stability and certainty
of the current regulatory environment
and support the work of our key
regulatory body, the Electricity
Authority. Even as its work continues,
we are expecting important changes
in climate policy in the next year. The
Interim Climate Change Committee
will be superseded by an independent
Climate Change Commission enabled
by the Climate Change Response
(Zero Carbon) Amendment Bill. That
Bill is expected to pass into law in late
2019. It accompanies further changes
to the Emissions Trading Scheme
that we expect to be announced
in the new financial year. Because
New Zealand’s high proportion of
renewable electricity is recognised as
a key enabler of decarbonisation in the
wider economy, we expect electricity
demand to rise in the years ahead.

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A different tomorrow
Meridian Annual Report 2019
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A change in demand
could hurt our business
In addition to how regulation
could affect our business in the
future, there is a potential impact
if demand significantly falls for
any reason.
As discussed earlier in this report,
market dynamics ensure that the
level of customer demand relative
to supply from generators is a key
determinant of electricity prices
for the long term. A fall in demand
or generation oversupply may
adversely affect prices, potentially
for a sustained period.
Demand can be affected by a
number of factors, including
activity levels in the industrial
sector, competitor behaviour,
regulatory changes, population
growth, economic conditions,
technological advances in the more
efficient use and generation of
electricity (including by customers,
potentially as a consequence
of regulatory subsidisation of
competing technologies), weather
and catastrophic events. All of these
could in turn affect electricity prices.
Policy changes to achieve strong
climate action could also cause a
significant reduction in demand
from disruption to emissions-
intensive industries.
Australian regulatory
reform continues
In Australia, our biggest challenge is
the lack of a stable, bipartisan federal
energy (and related carbon) policy.
A number of regulatory changes are
being rolled out at both state and
federal level, to improve customer
outcomes in the retail market. We
continue to work with governments
and regulators on these policies.

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Meridian Annual Report 2019
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NZAS is an important
part of our business
Last year we successfully negotiated
a financial contract to hedge NZAS's
wholesale market price exposure
on a further 50MW of base-load
power, enabling the company to
restart its fourth potline from
October 2018.
The new contract represents a 9%
increase in the plant’s production
capacity and a 1% growth in New
Zealand’s total electricity demand.
It sits separately from Meridian’s main
hedge agreement with NZAS that
provides price certainty for about
5,000GWh of electricity per year
to 2030.
NZAS’s commitment has important
impacts not just for our business
but also for the Southland economy
in terms of jobs and investment.
The aluminium produced by NZAS
continues to be among some of the
most environmentally friendly and
purest in the world. The benefits
reach beyond our shores. The
aluminium produced here means
less is made elsewhere in the world
using coal-fired generation.
We acknowledge, though, that if
NZAS were to close its Tiwai Point
smelter or reduce its electricity
consumption significantly, whether
or not it also terminated or breached
its agreement with us, we may be
adversely affected. This is because
such a closure or reduction would
likely result, in the near term, in a
decline in revenue, largely caused
by lower electricity prices (both
wholesale and retail).
NZAS consumes the equivalent of
around 38% of Meridian’s generation
output in any year, depending on
generation output and demand.
The size of any reductions and
associated losses, and therefore
the severity of the impacts on
Meridian, would depend on a
number of variables, including
the volume of NZAS’s reduction,
the period in which the reduction
occurs, transmission constraints,
the rate of residual New Zealand
electricity demand growth and
the response by generators and
electricity market participants.
For example, other electricity
generators with thermal generation
plant could choose  to mothball
or retire their plant, which could in
turn reduce the supply of electricity
and moderate any reduction in
wholesale electricity prices.
We do expect demand to increase
While we openly acknowledge the
risks of demand reducing, our overall
view is that demand will increase.
We believe the key driver of that
rise will be climate action policy –
and particularly the Climate
Change Response (Zero Carbon)
Amendment Bill, upcoming
changes to the Emissions Trading
Scheme, and the recently proposed
Clean Car Standard and Clean Car
Discount – which will likely lead to
increased decarbonisation in the
transport sector as electric vehicles
become more prevalent and also
the electrification of industrial heat
processes that currently rely on gas
and coal. Our initiatives to support our
customers to take up electric vehicles
in greater numbers and adopt new
technologies also align with our
commitments to UN SDG13 Climate
Action and SDG7 Affordable and
Clean Energy.
The physical impacts of climate
change could also increase demand.
Higher temperatures are likely to
have a direct impact on electricity
demand for heating and air
conditioning. Agriculture could be
affected due to increased drought
leading to an increase in irrigation
(and therefore electricity demand).
It is also possible that climate change
will lead to large-scale international
migration as globally regions become
uninhabitable, which could increase
New Zealand’s population and
therefore electricity demand.

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Encouraging electric vehicle uptake
Meridian supports a shift to more
electric vehicles on our roads because
they have such potential to help
decarbonise New Zealand’s transport
sector, which currently accounts
for around 20% of the country’s
emissions. Of course, more electric
vehicles will also increase demand
for electricity.
We want to accelerate the uptake
of electric vehicles in New Zealand.
Clearly, one of our goals as a leader
in sustainability is to be the first
choice for customers who have
electric vehicles. We introduced an
Electric Car pricing plan that rewards
consumers who purchase electric
cars with cheaper overnight electricity
rates for charging their vehicles.
In partnership with our business
customers, and at times with
Energy Efficiency and Conservation
Authority (EECA) funding, we are
also installing charging stations for
the public, such as at Aoraki/
Mt Cook. Despite this growing
charging infrastructure network,
New Zealand’s rate of fossil fuel to
electric conversion will have to grow
dramatically to meet the national
target of 64,000 electric vehicles on
the road by 2021. To help understand
how we can accelerate uptake, we
brought Christina Bu, Secretary
General of the Norwegian Electric
Vehicle Association, to New Zealand
in November to share her insights on
what New Zealand can learn from
Norway’s world-leading conversion
to electric vehicles. Norway’s electric
car transition is currently sitting at
over 40% converted.
Meridian’s Procurement and
Property Manager Nick Robilliard
was then invited to attend the global
EV Summit in Norway. In April, he
joined an international panel to
share the New Zealand story and
the key elements that are enabling
Meridian to make the shift. He
brought back insights on what is
possible next, the massive scale, and
the timeline for introducing electric
vehicles and the electrification of
other vehicles, including trucks,
marine and aviation vehicles.
Meridian’s own passenger vehicle
fleet is now almost 80% battery electric
vehicles (as distinct from hybrids that
still have petrol engines) and we are
on track to grow that to 90% by the
end of 2020. We’ve also succeeded in
converting 15% of our utility vehicles
(commercial light vehicles) used on
our operational worksites to electric,
and we are looking forward to new
models becoming available in the
next few years to enable us to meet
our EV100 commitment of 100%
electric vehicles by 2030.
In the year ahead we will continue
to promote a wider use of electric
vehicles, through our website and
advertising, our membership of
Drive Electric and the Climate Leaders
Coalition, participation in EVWorld and
EV100, and continuing to help other
businesses to electrify their fleets.
We know that the electrification of
our transport sector is one of the
most significant ways that Aotearoa
can combat climate change and we’re
committed to using our expertise
to successfully enable our country’s
transition to a net zero carbon
economy by 2050.

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Supporting the adoption
of solar in New Zealand
As the electricity sector continues
to evolve, we’re encouraging our
customers to adopt new technologies.
Many of our residential customers
who are motivated to switch to
new technologies want to play
their part in combating climate
change. While in New Zealand
residential solar installations are not 
a powerful climate action (given that
New Zealand’s electricity supply is
around 85% renewable already), our
customers see it as a way to live their
values and take greater responsibility
for their own power generation and
consumption. Currently, over 4,000
households across our Powershop
New Zealand and Meridian brands
use solar as part of, or, for all their
residential energy.
Commercial solar programmes have
the potential for far-reaching benefits,
as they use previously untapped
locations to generate renewable
energy, and commercial energy use
tends to be during the day when
solar generation is most effective.
We have partnered with Kiwi
Property to install almost 2,500
rooftop solar panels on shopping
centres in Christchurch, Palmerston
North, Hamilton and Auckland.
The programme will help make Kiwi
Property, the country’s largest listed
property company, New Zealand’s
biggest user of solar power. In June
the first of four installations was
switched on by Minister of Energy
and Resources, Hon. Dr Megan
Woods, at Northlands Shopping
Centre. The 672 panels generate over
200,000kWh of electricity per year,
enough to power the equivalent of
30 households or nearly 100 electric
vehicles for a year. As part of the
power purchase agreement model,
we installed and covered the upfront
system cost, and Kiwi Property now
purchases the electricity produced
for a fixed cost.
We also switched on New Zealand’s
largest rooftop solar array at
Mainfreight’s state-of-the-art
Auckland distribution centre. The
422kWp system features 1,408 high-
spec panels tilted at 10 degrees
to maximise efficiency and was
delivered by Meridian’s commercial
solar partner Reid Technology.
Here comes the sun in Australia
Installing solar panels is a very
important climate and bill
reduction action that Australian
households can take, and we
are building our customer base
around a strong sustainability
platform and amplifying our
brand credentials in that space.
We currently have over 22,000
customers in Australia who have
solar installations. Powershop has
successfully introduced initiatives
like Grid Impact, which offers
customers with solar and batteries
the opportunity to become part
of a Virtual Power Plant. Alongside
our partner Reposit, we activate
customers’ battery systems when
the cost of electricity spikes. This
takes pressure off the wider grid
and customers receive rewards for
opting to do this that help them
save on their power bills.
Up until recently, Australian
landlords and tenants have not
had good incentives to invest in
solar energy. We have worked with
the Australian company Stoddart to
develop SunYield
®
. This allows both
the landlords and tenants to benefit
from solar on new homes. An investor
can use the SunYield
®
solar power
system to sell solar power produced
on an investment property's roof
back to the tenants who occupy the
property. The investor has another
income stream, and the tenants get
a discounted rate for their power.
This is an innovative solution that
is a win for all parties involved.
Powershop Australia’s Your
Community Energy programme
has now raised over $500,000. The
programme works where customers
choose the Your Community Energy
Powerpack when they pay their bills –
this has a premium attached that
Powershop then distributes to not-
for-profit organisations to install small-
scale renewable energy solutions.

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Helping farmers measure carbon
For the agriculture sector in
New Zealand, the pressure to
understand and contain carbon
footprints will only intensify in
coming years, particularly for
the farming sector.
We partnered with Westpac
New Zealand to support a new
carbon calculator that gives farmers
a guide to the size of their carbon
footprints. The tool, developed by
Lincoln University’s Agribusiness
and Economics Research Unit
and Agrilink NZ, gives a farmer a
quick approximation of their farm’s
carbon footprint and compares it to
the distance travelled in a car or the
area that could be planted in forest
to offset their emissions. While the
new tool is not intended to replace
detailed greenhouse gas modelling
tools, it does provide a measure that
rural communities can use to act.
Replacing coal and gas boilers
For major users of energy like
industrial consumers, there are
opportunities to replace and
convert their existing coal and
gas boilers with plant that is
powered by electricity.
In Aotearoa this is a powerful climate
action and would increase demand
for electricity. These are not quick
fixes. They involve sometimes
complex considerations around
what is feasible commercially and
financially. For many big energy
users though, sustainability is driving
important and wider conversations
around efficiencies and more
responsible and effective supply
chains. We continue to investigate
how we can contribute, although
our current analysis shows that the
commercial gap between current
and alternative technologies
remains significant.
New options for curbing power use
Our customers in Australia can
act to reduce their electricity
consumption at peak times, saving
money as well as carbon emissions
from electricity generation, by
taking part in Curb Your Power,
our demand response programme.
This programme is available to
Powershop customers in Victoria
with smart meters. When there is
a peak demand event, Powershop
sends participants an SMS or app
notification asking them to curtail
their usage voluntarily for a set period
of time – no more than four hours.
If they successfully hit their Curb
targets, they automatically receive
discounts on their next energy bills.
This programme allows us to manage
overall electricity demand, while our
customers are able to make positive
contributions to the environment
by reducing their energy usage and
being rewarded for doing so.

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Making the most of powerful forces
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Making
the
most
of
powerful
forces

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•   
Our elements of success
Our business is made of wind,
water and sun. We’re excited about
clean energy and the benefits it
brings. We approach generation
responsibly and with integrity, in
alignment with generating 100%
from renewable sources.

59
Meridian Annual Report 2019
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Making the most of powerful forces
Hydro NZ
Wind NZ
Wind AU

Hydro AU
Generation (GWh
23
)Capacity (MW
24
)
203
525
1,244
12,326
13,851
14,226
13,825
13,109
14,298
15,000
12,000
900
600
300
0
FY15FY15FY16FY16FY17FY17FY18FY18FY19FY19
92
201
416
2,338
2,955
2,955
2,955
3,500
3,000
2,500
2,000
1,500
1,000
500
0
3,0473,047
The flexibility of hydro to deal
with shifts in demand and supply
is one of its great advantages
and is therefore the backbone of
New Zealand’s high percentage
of renewable energy. Hydro has
enabled the seamless integration
of large amounts of wind and
other intermittent renewable
energy generation to our energy
system and will continue to do
so in years to come.
However, the variability of water
inflows and the relatively low storage
capacity available create an energy
market that is one of the most
changeable commodity markets
in the world.
A key risk for Meridian’s New Zealand
hydro generation is the availability of,
and access to, water. The Waitaki and
Manapōuri hydro systems are heavily
influenced by seasonal hydrological
conditions. Adverse hydrological
conditions, resulting from dry
periods or drought conditions in
those catchments, may reduce
water levels and significantly affect
our generation capability.
Electricity retailers buy all their
electricity from the wholesale market
and these prices can vary significantly.
When we have low storage levels
resulting from low inflows, we may
be forced to spend more money
on purchasing electricity from
the wholesale market to meet our
customer commitments than we are
making from selling electricity we have
generated into the wholesale market.
This is a risk that could be
exacerbated by climate change,
however our modelling indicates
that average annual rainfall into
Meridian’s catchments could
increase by approximately 5–15%
by 2055. Seasonal rainfall changes
are projected, with winter rainfall
in Meridian’s hydro catchments
predicted to increase more than
summer rainfall. While this may
improve our ability to match electricity
demand, it will mean we need to
manage inflow volatility carefully.
23 Gigawatt hours:
measure of generating
output (energy).
24 Megawatts: measure
of generating capacity
(power).

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Stable cash flows
Changeable weather conditions,
and the volatility they create in
wholesale prices and electricity
demand, are part and parcel of
our business and we adjust our risk
management practices to manage
different trading conditions.
Our vertically integrated business
model is one way in which we
manage changeable commercial
risks. In New Zealand we also have
agreements with stakeholders
and resource consents that give us
some flexibility in how we use lake
water storage, and we employ what
amounts to ‘dry-year insurance’
through a range of financial
instruments with counterparties
that shield us from higher wholesale
market prices that can accompany
prolonged dry conditions. The
biggest  of these financial instruments
is a hedge contract or ‘swaption’ with
Genesis Energy, which we also use
to manage transmission constraints.
Together, these mechanisms help
us achieve greater price certainty
for our customers and more reliable
returns for our investors.
As a result, the business continues to
generate relatively stable, strong cash
flows despite the weather – and has
done so for some years. Operating
cash flows were $635 million in FY19,
$208 million (49%) higher than last
year, mainly due to the record level
of operating earnings. Total capital
expenditure in FY19 was $64 million,
$48 million of which was in business
capital expenditure.
The conditions we reported at half
year continued into the second
part of the year, with unplanned
gas supply constraints followed by
planned outages at the Pohokura gas
field. These shortages reduced gas
power station output, and the resulting
uncertainty put upward pressure on
wholesale prices. The impact of this
was compounded by below-average
hydro storage at Lake Taupō (leading
to lower hydro generation in the
North Island) and higher demand in
part due to increased production
at the Tiwai Point smelter.
Operating cash flows
800
600
400
200
0
427
635
452
470
440
FY15FY16FY17FY18FY19$M

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All of these factors meant wholesale
prices were significantly higher in
FY19 than the FY18 average. These
higher prices incentivised us to
generate at higher capacity and
encouraged thermal generation to
operate, including Genesis Energy’s
'Rankine units' at Huntly power
station. At the same time though,
we needed to keep an eye on hydro
levels to make sure we had enough
water for our traditionally lower inflow
period (winter). There were also times
when the transmission link between
the islands was not able to transmit all
of our power north, which limited our
ability to generate. Such conditions
can also cause wholesale market
price separation between the North
and South Islands.
During the gas supply events, we
made calls on our financial contract
with Genesis to manage our
commercial exposure to the high
spot market prices, as we eased back
on hydro generation when our hydro
storage was dropping below average,
and we entered our low-inflow
period. A large inflow event in March
(the same event that caused the West
Coast flooding) boosted our hydro
storage at the start of winter. We
finished the year in very good shape
and with a record financial result.
More transparency needed
Because wholesale prices were high
in the second half, the market was
much more unsettled for some of this
year and that led four small retailers
and a lines company to claim the
existence of an Undesirable Trading
Situation (UTS).
The Electricity Authority investigated
the matters in the claim and
concluded there was no UTS. It did
point out that spot prices in spring
2018 set new records but that these
prices reflected underlying supply
and demand constrained by low
hydro storage and gas production
outages. The regulator also
concluded there was no evidence
that the high spot prices were caused
by collusion or other undesirable
behaviour.
What this matter highlights for
us is the ongoing lack of visibility
of changes and developments in
the New Zealand gas market. The
lack of in-depth information not
only makes it harder for retailers to
compete efficiently, because they
don’t know what they’re planning for,
but also makes pricing potentially more
volatile because of perceived risks. Our
view is that the gas industry should
be required by regulators to deliver a
level of visibility in their activities that
is comparable with the requirements
of other energy sector participants.

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Our energy margin
Our energy margin is a measure of
the combined financial performance
of Meridian’s retail and wholesale
businesses and is a good indicator
of the success of our vertically
integrated model.
With high wholesale spot market
prices prevailing in the market
during much of FY19, New Zealand
generation spot revenue was 61%
higher than last year. An increase
of 8% in physical generation volumes
also contributed to this increase,
which was supported by inflows
of 104% of historical average.
While the higher spot prices meant
Meridian paid 57% more to supply
its New Zealand customers, higher
sales to those customers, the higher
generation revenue and prudent
market hedging saw New Zealand
energy margin increase 17%
above FY18.

2019
$M
2018
$M
Retail contracted
sales revenue
Revenues received from sales to retail customers
net of distribution costs (fees to distribution
network companies that cover the costs of
distribution of electricity to customers)
654629
Wholesale contracted
sales revenue
Sales to large industrial customers and fixed
price revenues from derivatives sold
524435
Costs to supply customersThe volume of electricity purchased to cover
contracted customer sales
(1, 874)(1,194)
Net hedging positionThe fixed cost of derivatives used to manage
market risk, net of the spot revenue received
from those derivatives
12641
Generation spot revenueRevenue from the volume of electricity that
Meridian generates
1,6721,039
Net VAS revenueThe net revenue position of virtual asset
swaps (VAS) with Genesis Energy and Mercury
New Zealand
11(2)
OtherOther associated market revenues and costs
including Electricity Authority levies and ancillary
generation revenues such as frequency keeping
(5)
(4)
Total New Zealand energy margin1,108944

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Making the most of powerful forces
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Australian energy margin was 37%
higher than FY18, with a full calendar
year of the seasonal generation from
our Australian hydro assets. However
hydro generation was impacted by
dry conditions in New South Wales
and lower wind volumes and plant
availability at Meridian Australia’s
two wind farms.
Powershop Australia grew its
electricity customer base 13%
during the year, with a 1% increase
in contracted electricity sales. With
the launch of a retail gas offer in
Victoria, Powershop Australia had
22,600 gas customers by the end
of FY19, with sales of 364 TJ.
With the three hydro power stations
we own in Australia, we physically
control the release of the water,
but the local water authority has
control over how the available
volumes of water are partitioned for
various users. The amount we can
generate depends on the amount
of water we are instructed to release
from the dam for downstream
cultural, irrigation, environmental
or recreational purposes. At Hume,
we’ve been working with the Murray-
Darling Basin Authority to trial a
change programme that allows us to
'shape' the water released from the
dam to coincide with peak electricity
demand. The Hume power station
has also undergone an automation
programme to allow operators to
Movement in EBITDAF
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
EBITAF
30 June
2018
Retail
contracted
sales
Wholesale
contracted
sales
Generation
spot
revenue
Cost to
supply
customers
Net cost
of hedges
Virtual
asset
swaps
Other
market
costs
AUS
energy
margin
Other
revenue
Trans-
mission
expenses
Employee
and other
operating
expenses
EBITDAF
30 June
2019
+89
-680
+85
+32
+3
838
633
+25
+13
-4
-23
666
-1
New Zealand Energy Margin +$164M
remotely control the output from the
station and where the electricity flows
into (Victoria or New South Wales).
Both of  these measures have enabled
us to make the most of higher
wholesale prices during the day.
M
In FY19, energy margin was the
significant driver behind the
increase in Group EBITDAF.