Mighty River Power

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Mighty River Power
Type Public (NZX: MRP, ASXMYT)
Industry Electric power generation
Predecessor(s) Electricity Corporation of New Zealand
Founded 1 April 1999 (1999-04-01)
Headquarters Auckland, New Zealand
Key people Doug Heffernan (CEO)
Products Electric power
Services Electricity retailing
Revenue Decrease NZ$1,382,432,000[1]
Operating income Decrease NZ$390,477,000[1]
Net income Increase NZ$114,761,000[1]
Total assets Decrease NZ$5,802,055,000[1]
Total equity Increase NZ$3,181,748,000[1]
Owner(s) New Zealand Government (51.78%)
Subsidiaries Mercury Energy (retail)
Metrix (metering)
Website www.mightyriverpower.co.nz

Mighty River Power Limited (NZX: MRP, ASXMYT) is a New Zealand electricity generation and electricity retailing company. It was formed from the breakup of the Electricity Corporation of New Zealand (ECNZ) in 1999 as a result one of the reforms of the New Zealand Electricity Market and corporatised to become a state-owned enterprise with its own board of directors and Ministerial shareholders. A state-owned enterprise from its founding, it was partially privatised by the Fifth National Government in May 2013, with the government retaining a 51.78 percent shareholding and the remaining 48.22 percent listed on the stock market.

The company owns and operates the hydroelectric generating stations on the Waikato River as well as geothermal plants in the Taupo area, the gas fired (combined cycle) Southdown plant in south Auckland and the largely unused plant (Marsden A and Marsden B) at Marsden Point near Whangarei.

In 2012, Mighty River Power produced 17% of the country's electricity.[2] According to its own website, the company supplies 22% of New Zealand peak energy demand, with about 80% of this coming from hydro-power.[3]

History[edit]

Mighty River Power was established on 1 April 1999, when the 1998 reform of the electricity sector took effect. The Electricity Corporation of New Zealand (ECNZ) was broken up into three state-owned generating companies - Mighty River Power, Genesis Energy and Meridian Energy. Mighty River Power took over the ownership and operation of the eight hydroelectric power stations on the Waikato River, New Zealand's longest, and also inherited the assets of two largely decommissioned oil-fired power stations at Marsden Point, near Whangarei.

In addition, the 1998 reforms forced the separation between lines (transmission and distribution) and supply (generation and retailing). On 1 April 1999, Mercury Energy, then the major lines and supply company for Auckland, New Zealand's largest city, was split between lines and supply. Mighty River Power inherited Mercury Energy's retail base and its share in the Southdown Power Station (in conjunction with the Natural Gas Corporation). Mercury Energy then became the name of Mighty River's retail business, and the sub-transmission and distribution business of Mercury Energy was renamed Vector.

In 2000, Mighty River purchased into the Rotokawa geothermal power station, to operate and maintain the station, and own the geothermal turbines in a joint venture with the Tauhara North No.2 Trust. Also that year, Mighty River Power commissioned the Mokai geothermal power station in a joint venture with the Tuaropaki Trust. One aspect that sets Mighty River Power apart from other geothermal generators is that it works in partnership with Māori landowners (the tāngata whenua) to benefit both Mighty River power and the tāngata whenua.[4]

In September 2002, Mighty River gained 100 percent ownership of the Southdown power station.

In 2004, Mighty River announce plans to refurbish the Marsden B plant to fire it on coal to increase supply security north of Auckland. Marsden B had been mothballed since it was completed in 1978 due to rising oil prices following the 1973 oil crisis and there being cheaper alternatives available. Greenpeace staged a nine-day occupation of the site in 2005, and after the Northland Regional Council granted consent, appealed to both the Environment Court and High Court, eventually overturning the consent. Mighty River appealed the High Court decision to the Court of Appeal, but in March 2007 dropped the proposal.

In 2008, Mighty River increased its generating capacity by opening the 100 MW Kawerau geothermal power station, increasing supply security to the eastern Bay of Plenty, a large timber processing area. In 2010, it opened the 140 MW Nga Awa Purua geothermal station near Taupo, complete with the largest single-shaft geothermal turbine in the world. The commissioning of Nga Awa Purua increased Mighty River's geothermal capacity to 385 MW, becoming the nation's largest geothermal electricity generator with 52.7 percent of all installed geothermal capacity.

Partial privatisation[edit]

In December 2011, the National Government announced plans to reduce its shareholding in Mighty River Power, as well as in the three other state-owned energy companies, from 100 percent to 51 percent and to sell off the remaining 49 percent as part of its controversial "mixed-ownership model" plan. Mighty River Power was to be the first company to be partially sold in September 2012, pursuant to legislative changes and market conditions. [5][6] However, threatened legal action and unfavourable market conditions saw the government delay any sale until March 2013 at the earliest.[7]

The Government began taking registrations of interest from the public in Mighty River Power shares on 5 March 2013.[8][9] More than 35,000 people tried to register in the first six hours,[10] causing the registration website to crash for much of the day.[11][12] By midnight, more than 90,000 people had registered.[13][14]

In anticipation of the sale, in April 2013 State Owned Enterprises Minister Tony Ryall said director fees would be increasing from $49,000 a year to $85,000, and the chair's fees from $98,000 to $150,000, despite still being majority-owned by taxpayers.

The Financial Markets Authority approved the sale of Mighty River Power on 12 April, with the initial public offering (IPO) opening on 15 April.[15] However, the IPO was temporarily suspended on 22 April while a supplementary disclosure was issued, after the Labour and Green parties in opposition announced plans to reform the electricity market if elected to government at the 2014 election. At the close of the IPO on 5 May, there were 113,000 shareholders, and on 8 May the opening share price was set at $2.50, raising $1.7 billion.[16] The Government was slightly disappointed, blaming the Labour-Green policy for putting off many more potential shareholders, and with the Finance Minister indicating before the policy was announced that the price would be in the $2.70 to $2.80 range.[17] The government retained 51.78 percent of the shareholding, with another 1.02 percent owned by other Crown interests (mainly the New Zealand Superannuation Fund).[18]

By September, shares had slumped to $2.16, well below the float price,[19] and in October the company announced it would be buying back up to $50 million in shares.[20]

Power stations[edit]

Mighty River Power operates 13 power stations, all in Auckland, Waikato, and the Bay of Plenty. In total, the company has 1638 MW of generating capacity - composed of 1078 MW hydroelectric, 385 MW geothermal, and 175 MW natural gas.

Name Type Location Capacity
(MW)
Annual generation
(average GWh)[21]
Commissioned Notes
Arapuni Hydroelectric Waikato River 196.7 805 1946
Aratiatia Hydroelectric Waikato River 78 330 1964
Atiamuri Hydroelectric Waikato River 84 289 1962
Karapiro Hydroelectric Waikato River 96 490 1948
Kawerau Geothermal Kawerau, Bay of Plenty 100 800 2008
Maraetai Hydroelectric Waikato River 360 885 1954, 1971
Mokai Geothermal northwest of Taupo 112 900 2000 Joint venture with Tuaropaki Trust
Nga Awa Purua Geothermal north of Taupo 140 1100 2010 Joint venture with Tauhara North No.2 Trust
World's largest geothermal turbine (147 MW rated)
Ngatamariki Geothermal north of Taupo 82 2013
Ohakuri Hydroelectric Waikato River 112 400 1962
Rotokawa Geothermal north of Taupo 33 210 1997 Joint venture with Tauhara North No.2 Trust
Southdown Gas CCGT cogeneration Southdown, Auckland 175 850 1998
Waipapa Hydroelectric Waikato River 51 242 1961
Whakamaru Hydroelectric Waikato River 100 494 1956

Generation developments[edit]

Name Type Location Planned
capacity (MW)
Status
Puketoi Wind Puketoi Ranges consent application lodged August 2011[22] granted June 2012[23]
Te ia a Tutea Geothermal northeast of Rotorua initial exploration[24]
Turitea Wind south-east of Palmerston North 180 consents approved

International developments[edit]

Name Type Location Planned
capacity (MW)
Status
Hudson Ranch Geothermal California, USA 50 opened May 2012[24]
Tolhuaca Geothermal southern Chile exploration[24]
Weilheim Geothermal Germany exploration[24]

Subsidiaries[edit]

In addition to its generation assets, Mighty River Power also incorporates or has major shareholdings in:

  • Mercury Energy, an electricity and gas retailer
  • Bosco Connect, an electricity retailer to inner city apartments
  • Metrix, a metering and meter-reading business
  • Tiny Mighty Power,[25] an electricity retailer

Investments[edit]

Mighty River Power is a founding shareholder in GeoGlobal Energy LLC, which is actively exploring and developing geothermal areas in USA, Chile and Germany.[26][citation needed]

See also[edit]

References[edit]

  1. ^ a b c d e "Annual Report 2013". Mighty River Power. September 2013. Retrieved 30 September 2013. 
  2. ^ "Energy in New Zealand 2013". MED. September 2013. 
  3. ^ "Mighty River Power: About Us: Generation". Mighty River Power. Retrieved 1 December 2007. 
  4. ^ "Geothermal Generation". Mighty River Power. Retrieved 6 February 2011. 
  5. ^ Romanos, Amelia; Bennett, Adam (15 December 2011). "Mighty River Power first SOE to go". The New Zealand Herald. Retrieved 12 January 2012. 
  6. ^ "Mighty River Power first state-owned asset to be sold - English". 3 News. 15 December 2011. Retrieved 12 January 2012. 
  7. ^ Watkins, Tracy (3 September 2012). "Sale of Mighty River Power delayed". Fairfax Media (via Stuff.co.nz). Retrieved 15 October 2012. 
  8. ^ Gower, Patrick (5 March 2013). "Mighty River sale opens". 3 News NZ. 
  9. ^ "Market may take a hit as Mighty River sale attracts 'huge interest'". NZ Herald. 4 March 2013. 
  10. ^ "Brokers contact Mighty River investors". 3 News NZ. 6 March 2013. 
  11. ^ "Mighty share website crashes". 3 News NZ. 5 March 2013. 
  12. ^ "Mighty River share website crashes". NZ Herald. 5 March 2013. 
  13. ^ "Mighty River share registration high". Stuff.co.nz. 6 March 2013. 
  14. ^ "Demand for Mighty River hits 90,000". 3 News NZ. 6 March 2013. 
  15. ^ "Mighty River sale gets FMA approval". 3 News NZ. 12 April 2013. 
  16. ^ Hutchison, Jonathan (10 May 2013). "Shares Rise After I.P.O. of New Zealand Power Utility". NY Times. 
  17. ^ Bennett, Adam (9 May 2013). "Mighty River $2.50 price hit by power policy". The New Zealand Herald. Retrieved 9 May 2013. 
  18. ^ Parker, Tasmyn (17 May 2013). "Stock Takes: Mighty nervous". The New Zealand Herald. Retrieved 17 May 2013. 
  19. ^ MightyRiverPower pair snap up shares. 3 News NZ. 30 September 2013.
  20. ^ Mighty River Power to buy back shares. 3 News NZ. 10 October 2013.
  21. ^ "List of Generating Stations November 2010 - New Zealand Electricity Authority". Retrieved 25 January 2011. 
  22. ^ "Mighty River Power lodges application for wind development at Puketoi" (Press release). Mighty River Power. 3 August 2011. 
  23. ^ "Mighty River gains consents for Puketoi wind farm" (Press release). Mighty River Power. 25 June 2012. Retrieved 25 June 2012. 
  24. ^ a b c d "Mighty River Power Development Projects Update" (Press release). Mighty River Power. 13 June 2012. 
  25. ^ "Tiny Mighty Power". 
  26. ^ "About Geo Global Energy". GeoGlobal Energy. 2011-01-12. Retrieved 2011-01-12. 

External links[edit]