MCY Mercury NZ ( MRP Mighty River Power)

[Xerof]

http://www.iscr.org.nz/f747,20610/Electricity_Lines_Ownership_v2_BH_TT.pdf

out of ~30 lines companies, only 4 are 100% private, 2 mixed ownership, the vast majority of the rest are consumer trusts or municipals

[Xerof]

lol, only put that up for you to analyse the facts Belg and perhaps correct your false original statement....well done

roger and out

[GR8DAY]

.....anyone know when the latest div gets paid?

[silu]

.....anyone know when the latest div gets paid?

all there on the interwebs
http://www.mightyriver.co.nz/Investor-Centre/Dividends/Historical-Dividends.aspx

[couta1]

.....anyone know when the latest div gets paid?
March 31st

[robbo24]

What's this? MRP bouncing off the MA30 and shooting through the MA100?

Latest political polls might have something to do with it :)

BEAST MODE ACTIVATED?

[GR8DAY]

.....yes I think so ROBBO. The best run up for sometime and set to continue........maybe as high as $2.25? Looking very well supported now. With the declared divi Im now happily in the black! Politics at play here Im thinking??

[artemis]

.....Politics at play here Im thinking??

I'm sure that is correct. But the 2014 election is by no means a done deal. IMHO.

[rd52]

Can anyone explain the NTA figure of $4.10, as per ASB and NZX?

Cheers,
RD

[Snow Leopard]

Can anyone explain the NTA figure of $4.10, as per ASB and NZX?

Cheers,
RD

Requires you to look through the thread a bit - though.

Best Wishes
Paper Tiger

[robbo24]

What's this? MRP bouncing off the MA30 and shooting through the MA100?

Latest political polls might have something to do with it :)

BEAST MODE ACTIVATED?

Good call Robbo, still going!

[Snow Leopard]

Well much to my surprise I have a few MRP shares sitting in the shoe box in the corner looking a little unloved.
If I ever come up with a good reason for why they are here (short term rising price and volume probably) I will let you know.
If they resume their decline I will shoo them out.

Best Wishes
Paper Tiger

So they have been sufficiently good (up over 7% in less than 3 weeks) that they are now allowed to sleep at the end of the bed.

Best Wishes
Paper Tiger

[Snoopy]

So they have been sufficiently good (up over 7% in less than 3 weeks) that they are now allowed to sleep at the end of the bed.


Many MRP shareholders seem hard to please. Despite less than favourable weather conditions Doug Heffernan and the team have kept their dividend and profit projections on track. MRP is still NZs best power company, even if it was not the best value when most of us joined the share register.

Of course we foundation shareholders have an excuse for buying too high. We didn't know what the price of the shares would be when we signed up. I like most others assumed the big boys would be sensible with their tendering price for shares. A pity then than John and Bill reserved a large basket of the issue for their overseas institutional mates who dumped the shares within weeks of listing, whereas genuine NZ shareholders were scaled back. I would argue that if the NZ investors were genuinely placed at the front of the queue, as we voters were lead to believe, a large part of the subsequent sell off would not have happened and the MRP share price would be higher than it is now.

Shareholders will have an opportunity to vote for the retiring to be rehired board members or not at the next AGM. I would encourage them to do so if they believe Doug Heffernan and the team have done a good job. If you don't like the MRP price action since listing though, there is another vote you can cast in September which will bring to account those responsible for it.

SNOOPY

[macduffy]

there is another vote you can cast in September which will bring to account those responsible for it.


In which case, it might be a good idea to first sell all your power co. shares!

:ohmy:

[RTM]

In which case, it might be a good idea to first sell all your power co. shares!

:ohmy:

Not so sure Macduffy. Seems to me that the Greens / Labour are to blame for the languishing of the share prices of the power companies. As well as ensuring that NZ Inc got a much lower price for them. Bringing those folk to account in September might well address the SP of those companies.

[fish]

Snoopy I don't own mrp shares but do own contact and will be getting genesis.
The reason is simple-mrp relies on the Waikato river system for most of its generation-great when its wet but Waikato has a drought..
Taupo is nearly at its lowest limit.
I expect a prolonged period of high prices and I don't know how mrp will cope with this lack of generation and potentially having to buy power.
I know they coped last year-but taupo is near its low 2 months earlier this year and rain looks unlikely to save them.
Just my observations-I don't have the research you will have done-but what plans have they to cope with a severe Waikato drought ?

[Snoopy]

Snoopy I don't own mrp shares but do own contact and will be getting genesis.
The reason is simple-mrp relies on the Waikato river system for most of its generation-great when its wet but Waikato has a drought..
Taupo is nearly at its lowest limit.
I expect a prolonged period of high prices and I don't know how mrp will cope with this lack of generation and potentially having to buy power.
I know they coped last year-but taupo is near its low 2 months earlier this year and rain looks unlikely to save them.
Just my observations-I don't have the research you will have done-but what plans have they to cope with a severe Waikato drought ?

Fish, MRP have brand new geothermal station just come on line which provides more of a buffer on those low Waikato river levels. There isn't the same lack of water in the South Island hydro system. Now Transpower has smartened up the interisland link, so more South Island power can come across the cook strait cable to meet that North Island demand. At the moment MRP still have a gas power station as well, Southdown near Auckland. Reading between the lines in the MRP interim report, there is a hint it might be mothballed. MRP would hardly do that if they perceived a serious long term power shortage for themselves would they?

I take on board your point that lake Taupo being near its lows is not ideal for MRP. I do acknowledge that in the worst case MRP may suffer some pain. I don't believe it is a long term issue for MRP when viewed as a multi-year investment though.

SNOOPY

discl: hold MRP

[mouse]

Fish, MRP have brand new geothermal station just come on line which provides more of a buffer on those low Waikato river levels. There isn't the same lack of water in the South Island hydro system.
I take on board your point that lake Taupo being near its lows is not ideal for MRP. I do acknowledge that in the worst case MRP may suffer some pain. I don't believe it is a long term issue for MRP when viewed as a multi-year investment though.

SNOOPY

discl: hold MRP
MRP is near to its customers. It does not have to maintain a very large canal system to move water around the McKenzie Country. Nor does it have to rely on the Cook Straight cable. I do not believe that Lake Taupo will be half-full for ever. Weather is whether? MRP have large Geothermal capacity which they are using as base load at present.But if we get plenty of water, it could switch base load to hydro.
My view is that it is prudent to hold both Meridian and MRP. I am very negative about Genesis.

[axe]

MRP is near to its customers. It does not have to maintain a very large canal system to move water around the McKenzie Country. Nor does it have to rely on the Cook Straight cable. I do not believe that Lake Taupo will be half-full for ever. Weather is whether? MRP have large Geothermal capacity which they are using as base load at present.But if we get plenty of water, it could switch base load to hydro.
My view is that it is prudent to hold both Meridian and MRP. I am very negative about Genesis.

Why not hold all three? They are very diverse.

The generation mix.
The geographical split.
The generation / retail split.

[Harvey Specter]

Hmmm ... More than half (56%) of connections are in the 4+2. Hmmm ... That 4+2 are heavily weighted towards urban areas (70% of all urban throughout NZ) that are experiencing the big price risesNope Xerof - "[An] Inconvenient truth for the pro-asset sales cryers" methinks ;)I missed this discussion last month.Lets not forget that Wellingtons Electricity is controlled privately ...by the CHINESE Winston would not be happy.

[sharer]

Why not hold all three? They are very diverse.

The generation mix.
The geographical split.
The generation / retail split.

I agree with your suggestion Axe, broadly for the three main reasons you list.
Although i continue to disagree with the Nats program of asset sales, & still consider the false economic reasoning offered by Key etc wrong & wilfully stupid, the political fact was that they were determined to do the whole thing, our pathetic system of government meant there was no way to stop them, and by differing mechanisms in each of the three floats investors have achieved much better yields than any bank (or as far as i know industrial bonds now on the market) are offering in at least the next 5 years, so it makes simply pragmatic sense to invest in each of the three electricity floats, for varying reasons.

How long to hold for is a separate calculation now for each of them. Their relative weighting in the portfolio also requires calculation, and willingness to rebalance sometimes.

Disc: Now holding MRP, MEL, & GNE, and now working on my exit strategy (possibly medium-term) for each of them; considering longer term hold also possible (esp MEL).

[sharer]

Why not hold all three? They are very diverse.

The generation mix.
The geographical split.
The generation / retail split.

I agree with your suggestion Axe, broadly for the three main reasons you list.
Although i continue to disagree with the Nats program of asset sales, & still consider the false economic reasoning offered by Key etc wrong & wilfully stupid, the political fact was that they were determined to do the whole thing, our pathetic system of government meant there was no way to stop them, and by differing mechanisms in each of the three floats investors have achieved much better yields than any bank (or as far as i know industrial bonds now on the market) are offering in at least the next 5 years, so it makes simply pragmatic sense to invest in each of the three electricity floats, for varying reasons.

How long to hold for is a separate calculation now for each of them. Their relative weighting in the portfolio also requires calculation, and willingness to rebalance sometimes.

Disc: Now holding MRP, MEL, & GNE, and now working on my exit strategy (possibly medium-term) for each of them; considering longer term hold also possible (esp MEL).

[sharer]

sorry about duplication, seems due to site malfunction. Now i can't delete it ...

[GTM 3442]

Why not hold all three? They are very diverse.

The generation mix.
The geographical split.
The generation / retail split.

I do (or will) hold all three, as well as TPW, KCE, and CEN, in rough relationship to their generating capacity.

The strategy is based on the assumption that the electricity market will turn a profit and pay me a dividend.

And on the assumption that if one company has a bad year, another company will have a correspondingly good year. For example, low lake levels in Taupo with high lake levels in the South Island are good for MEL, but bad for MRP.

Time will tell.

[mouse]

I do (or will) hold all three, as well as TPW, KCE, and CEN, in rough relationship to their generating capacity.

The strategy is based on the assumption that the electricity market will turn a profit and pay me a dividend.

And on the assumption that if one company has a bad year, another company will have a correspondingly good year. For example, low lake levels in Taupo with high lake levels in the South Island are good for MEL, but bad for MRP.

Time will tell.
But if limited funds apply, as in my case, then you do have to pick winners and losers. The two best power companies seem to me to be Mighty River and Meridian. They provide a geographical spread of generation. Meridian is particularly brilliant due to having Manapouri which is very underutilized at present. Get rid of the smelter and sell the power to the highest bidder.

[GTM 3442]

But if limited funds apply, as in my case, then you do have to pick winners and losers. The two best power companies seem to me to be Mighty River and Meridian. They provide a geographical spread of generation. Meridian is particularly brilliant due to having Manapouri which is very underutilized at present. Get rid of the smelter and sell the power to the highest bidder.

Hi mouse,

"Good things take time"

Just because I have a strategy doesn't mean I have to implement it all at once!

The smelter ? All that capacity from Manapouri suddenly available and looking for a home? Sounds like a recipe for a price war to me!

Thank you very much, but no. Although I suspect that my strategy could leave me "well positioned". . ..

[RTM]

Nice operational report by MRP this morning. And hopefully this weather system will start the replenishment of Lake Taupo.
https://www.nzx.com/companies/MRP/announcements/249587

[mouse]

Help Needed. I am a small investor, with 1,600 Mighty River shares, bought at $2.50 each, total $4,000.
I also have 3,600 shares in Meridian, bought on hire purchase, $3,600 down and $1,800 in 12? months. But full dividends now. So the total cost really is $5,400.
We then come to comparing apples and apples. Both are power companies. One lot of shares cost me $4,000. The other lot $5,400.
Mighty River cost, $4,000. Dividend paid March 2014, $174.20 cash in the bank.
Meridian, cost $5,400. Dividend paid April 2014, $136.44 cash in the bank.
So. Meridian has cost more than Mighty River, yet the dividends are less. More Mysterious is the fact that MRP shares have lost value since their float, but Meridian have seen their share price increase.
Snoopy, have you any ideas why? Or anyone else? Should I sell Meridian, at a profit, and Buy MRP? Or just float along?

[percy]

Both are now in an uptrend.[The trend is your friend].
Sit back and watch your profits,and dividends grow.

[iceman]

Both are now in an uptrend.[The trend is your friend].
Sit back and watch your profits,and dividends grow.

Are you saying mouse is well positioned ? ;) I hold all 3 in fairly equal weighting and am happily holding for the long term, subject to Government policy changes of course.

[percy]

Are you saying mouse is well positioned ? ;) I hold all 3 in fairly equal weighting and am happily holding for the long term, subject to Government policy changes of course.

Exactly!!! He would be "poised" had he also held GNE. lol.
What is your third one?

[iceman]

Exactly!!! He would be "poised" had he also held GNE. lol.
What is your third one?

I hold MRP, CEN and GNE (luckily applied in several CSNs) in fairly equal $ numbers.

[percy]

I hold MRP, CEN and GNE (luckily applied in several CSNs) in fairly equal $ numbers.

Clever thinking.!!!
POISED!!!!!!!!!!

[Xerof]

I can't help thinking this 'diversification' across a range of electricity sector companies is very similar to what we witnessed back in 2006/7 with the finance companies. I'm not saying the sector is going the same way as the finance companies did, but the underlying principle is the same.

My personal view is to (over the course of the next 12 months) pick the winner, divest the rest and be happy with one representative in the portfolio.

Why I say don't rush into divesting now is due to the likely collection of some excellent divi's up until mid 2015, and some bonus shares. I think it is likely that the electorate is going to retain the incumbents in office (by default rather than by anything else) so the (political) threats of economic destruction of wealth will dissipate, and the mid term tale of the tape for equities displays no reason to get out (but must of course be monitored)

I was particularly interested to read in the Craigs analysis of Genesis, a table of comparatives, in which they valued Meridian (as instalment receipts) at 1.65. Not sure if many people picked up on that, but for me it is the one I personally will retain.

Sorry to talk about everything but MRP on the MRP thread, so for relevance to this thread, I did not participate in that float. :mellow:

[Snoopy]

Help Needed. I am a small investor, with 1,600 Mighty River shares, bought at $2.50 each, total $4,000.
I also have 3,600 shares in Meridian, bought on hire purchase, $3,600 down and $1,800 in 12? months. But full dividends now. So the total cost really is $5,400.
We then come to comparing apples and apples. Both are power companies. One lot of shares cost me $4,000. The other lot $5,400.
Mighty River cost, $4,000. Dividend paid March 2014, $174.20 cash in the bank.
Meridian, cost $5,400. Dividend paid April 2014, $136.44 cash in the bank.
So. Meridian has cost more than Mighty River, yet the dividends are less.


Mouse, Meridian in the prospectus declared that it expects to pay its dividends for FY2014 of 10.5cps in two instalments, one in April 2014 and the other in October 2014. The April interim dividend (the one you got) was 4.19cps. Come October you can expect a final dividend of 6.31cps which will bring the total to 10.5cps.

The underlying MEL share you can get by adding the final 50c payment to the trading price of the instalment receipt (currently $1.175). The underlying share price is therefore $1.675. This gives a forecast net dividend yield of:

10.5 / 167.5 = 6.27%

Mighty River Power OTOH has already paid a 7.2cps dividend on 30th September 2013 and another dividend of 5.2cps on 31st March 2014. To make it strictly comparable for the same time period I need to know what the MRP dividend is expected to be in September 2014. MRP are forecasting a FY2014 total dividend of 13cps, which translates to a final dividend of 7.8cps. MRP are currently trading (based on the MRP share price of $2.21) on a net dividend yield of:

13 / 221 = 5.9%

So it looks like Meridian is paying the higher yield on a share fully paid basis.

On an instalment receipt basis, ignoring the 50c capital payment from next year the Meridian yield is much higher.

10.5 / 117.5 = 8.9%

Your perception that Meridian is paying less than Mighty River is I suspect only true for the six month time window that you choose to observe.

SNOOPY

[Snoopy]

More Mysterious is the fact that MRP shares have lost value since their float, but Meridian have seen their share price increase.
Snoopy, have you any ideas why? Or anyone else? Should I sell Meridian, at a profit, and Buy MRP? Or just float along?


Meridian shares you cannot buy, only the instalment receipts. Instalment receipts are by their nature more volatile than the underlying shares. So comparing MRP with MELCA is not a like with like comparison.

Another thing that is affecting the relative performance of MRP and MELCA is the fact that the general market environment was more in favour of high yielding shares when MRP listed and more in favour of growth shares when MELCA listed. In effect Meridian listed in a less favourable environment for 'dividend' shares and so ended up listing cheaper. As an investor now, you have to forget about the listing price. The climate of the market then means that all of we MRP IPO investors 'overpaid' for our MRP shares. But it will be the performance of MRP and MEL going forwards (and the environment that shapes the future performance) that will determine the share price direction from here on in.

To summarize, just because the share price performance of MRP has been worse than MELCA, does not mean the underlying MRP company is performing worse. It also doesn't mean that MRP is relatively cheap compared to MELCA. From a strict yield basis MELCA is the better investment. But that assumes you will have no trouble stumping up the 50c final payment to convert MELCA to plain MEL. There is also the bonus shares you will get on MRP shares if you keep holding for two years after the float.

On balance, I would look at ultimately you might look to equalise your holding which would mean buying more MRP. Wait till the Labour/Greens rise in the polls again though. The MRP share price should come back a bit then.

SNOOPY

[Snoopy]

I can't help thinking this 'diversification' across a range of electricity sector companies is very similar to what we witnessed back in 2006/7 with the finance companies. I'm not saying the sector is going the same way as the finance companies did, but the underlying principle is the same.


I don't see a parallel between finance companies and electricity companies myself. It is easy to see why the demand for high risk financing might go away when the economy is squeezed. Electricity demand is much more likely to stay steadier, no matter what happens to the wider market.

I do take the lesson of only investing in the very best finance companies (with hindsight I guess this means just the banks) when assembling a term deposit portfolio. But which is the best electricity company to invest in? In the short term, the answer to that question probably depends on rainfall and lake storage capacity, and a company's resilience to adverse events. You could draw up a scenario on what might be the best company for a particular annual waether prediction. But unless you were absolutely sure you knew what the weather might do, I can't see you being able to know in advance which of the gentailers will do best.



My personal view is to (over the course of the next 12 months) pick the winner, divest the rest and be happy with one representative in the portfolio.


So which power company will be the winner in your view? You do have a point of not being over represented by power comnpanies in your portfolio.



Why I say don't rush into divesting now is due to the likely collection of some excellent divi's up until mid 2015, and some bonus shares. I think it is likely that the electorate is going to retain the incumbents in office (by default rather than by anything else) so the (political) threats of economic destruction of wealth will dissipate, and the mid term tale of the tape for equities displays no reason to get out (but must of course be monitored)


Five months is a long time in politics!

SNOOPY

[Snoopy]

I was particularly interested to read in the Craigs analysis of Genesis, a table of comparatives, in which they valued Meridian (as instalment receipts) at 1.65. Not sure if many people picked up on that, but for me it is the one I personally will retain.


If Craigs are assuming no change of government, then an installment receipt will likely do better from here, I agree with that. But that is because in an installment receipt, all of the risk must be priced into the partly paid capital. That will make MELCA more volatile than all the other alternative NZ power gentailer investments going forwards. If Labour look like getting in, I predict MELCA will be the worst performer of all, even though on a fully paid basis, I believe MRP carries the greatest investment risk should a Labour/Green power policy be implemented.

SNOOPY

PS I also believe that in terms of being able to balance geothermal generation and hydro generation MRP is the best power company of all. That makes it worth holding despite the Labour/Green risk IMO.

[mouse]

[
SNOOPY
PS I also believe that in terms of being able to balance geothermal generation and hydro generation MRP is the best power company of all. That makes it worth holding despite the Labour/Green risk IMO.[/QUOTE]

Many thanks Snoopy and friends for your comments.
Clearly I will have to wait for the final dividend to compare the twelve months performance of both companies.
I am rather keen on Hydro electrical generation. Geothermal is useful, but I am sure it costs a lot more per kWh than Hydro. Of course Hydro needs a full head of water, so is a problem in drought.
Which brings me to Meridian. Who have Wind Turbines. Why? What use are they? Apart of course from generating noise and killing off birds. But Meridian have Lake Manapouri, which in 2013 produced 4546GWh. How much are we getting for that bit of production? Why not 'mothball' all the Wind generators, and just sell the Manapouri electricity onto the main grid? Page 58 of the IPO document shows the generation capacity, and production of the various Meridian sites.
But wait for the twelve month report to compare apples with apples.

Note, Meridian and Mighty River seem to me to be power companies with very similar production.

[Snoopy]

Many thanks Snoopy and friends for your comments.
Clearly I will have to wait for the final dividend to compare the twelve months performance of both companies.
I am rather keen on Hydro electrical generation. Geothermal is useful, but I am sure it costs a lot more per kWh than Hydro. Of course Hydro needs a full head of water, so is a problem in drought.


Geothermal or Hydro cheaper? Meridian pulled out of project aqua on the Waitaki. Most of the big power stations commissioned since have been geothermal. I guess it depends on how you measure cost.

In the heyday of Hydro, there was no resource management act. Would all of MRPs power stations on the Waikato have been built in todays political climate if the resource management act had been in force then? Not a very useful question to ask I know, as they all were built and are now owned by MRP.

All of those Waikato dams were built when the price of fuelling the earthmoving equipment was peanuts in today's terms. I suspect the economics of hydro dams would be very different today if you evaluated building one from scratch. I think the building of MRPs geothermal stations wasn't just made on cost considerations though. They are a very good fit with hydro because under the earths crust in the central North Island the earth continues to bubble away rain or shine. This means the use of the hydro power can be cut back when lake storage is low, and the company (MRP) doesn't have to buy power on the open market to fill the gap anymore. To me this is the great appeal of MRP.

MRP is the best balanced entirely renewable generator (forgetting about MRP's Southdown gas turbine which is now a back up plant), that is located closest to NZ's largest power market (Auckland). To me that is a killer combination. Yes I am smarting about paying too much in the IPO. But quality never comes cheaply. And I intend being a shareholder in MRP for the long haul.

SNOOPY

[Snoopy]

Which brings me to Meridian. Who have Wind Turbines. Why? What use are they? Apart of course from generating noise and killing off birds. But Meridian have Lake Manapouri, which in 2013 produced 4546GWh. How much are we getting for that bit of production? Why not 'mothball' all the Wind generators, and just sell the Manapouri electricity onto the main grid?


Up until recently the cook strait cable would not have been able to cope with Manapouri coming onto the national grid. Even now, I don't think Manapouri is even connected to the grid down south yet.

I wouldn't be too down on wind farms. On a windy day in the capital, which happens often, the Meridian's Makara wind farm can power most of Wellington with minimal transmission line loss.

SNOOPY

[Marilyn Munroe]

Even now, I don't think Manapouri is even connected to the grid down south yet.

SNOOPY

The power pylons you can see from your house marching across the Port Hills towards the Bromley sub-station carry wires that start at Manapouri.

At a presentation given by Patrick Strange the former CEO of Transpower during the time of uncertainty over the smelter someone asked if the Manapouri output became available to the general market would Transpower extend high voltage DC link futher south to Manapouri? Mr Stange said no because existing capacity was sufficient.

Boop boop de do
Marilyn

[mouse]

The power pylons you can see from your house marching across the Port Hills towards the Bromley sub-station carry wires that start at Manapouri.

At a presentation given by Patrick Strange the former CEO of Transpower during the time of uncertainty over the smelter someone asked if the Manapouri output became available to the general market would Transpower extend high voltage DC link futher south to Manapouri? Mr Stange said no because existing capacity was sufficient.

Boop boop de do
Marilyn
I cannot see how Transpower can conspire with the power generators to stop NZ having cheap power. Plus I look at the maintenance costs of both Geothermal and Wind and conclude they are much greater than hydro. I agree Mighty River needs back-up, and Geothermal is right for that. But Meridian surely should be able to make the best commercial use of its Hydro generation plant. Which means getting the Smelter to pay at least 6 cents a unit. And I am paying 26 cents a unit.

[Harvey Specter]

Which means getting the Smelter to pay at least 6 cents a unit. And I am paying 26 cents a unit.You are probably paying about 9c for power. The rest is transmission, distribution and retail.

It seems not many understand this for some strange reason. For this reason, Labours policy of having it split out on the invoice is probably a good thing.

[mouse]

You are probably paying about 9c for power. The rest is transmission, distribution and retail.

It seems not many understand this for some strange reason. For this reason, Labours policy of having it split out on the invoice is probably a good thing.
It seems to me that one possible method of finding out what MRP or Meridian are actually pocketing for electricity is to divide their income by the amount of power generated. Any ideas on this?

[Snow Leopard]

It seems to me that one possible method of finding out what MRP or Meridian are actually pocketing for electricity is to divide their income by the amount of power generated. Any ideas on this?

Page 2 (https://nzx.com/files/attachments/192685.pdf)

Best Wishes
Paper Tiger

[Harvey Specter]

It seems to me that one possible method of finding out what MRP or Meridian are actually pocketing for electricity is to divide their income by the amount of power generated. Any ideas on this?I don't think that works as they also earn on the retail component (ie the admin to bill, collect and Helpdesk 100,000 of customers). And I think transmission/distribution is a cost of sales, so revenue includes transpower/vectors earnings.

[mouse]

I don't think that works as they also earn on the retail component (ie the admin to bill, collect and Helpdesk 100,000 of customers). And I think transmission/distribution is a cost of sales, so revenue includes transpower/vectors earnings.
I went to a Contact Energy AGM a few years ago and asked afterwards, 'How much does it cost Contact to generate using hydro?' The answer was about 2 cents a unit on day to day operation. To which of course must be added major maintenance and depreciation. Maybe 1 cent a unit?

[robbo24]

.....yes I think so ROBBO. The best run up for sometime and set to continue........maybe as high as $2.25? Looking very well supported now. With the declared divi Im now happily in the black! Politics at play here Im thinking??

I think the MRP buyback might have just dried up... Back up to $2.30 though, and a lot of sissy sellers have been taken out. Charts looking good. Interesting to see what happens from here given the very clear value in MRP at this price.

[axe]

I think the MRP buyback might have just dried up... Back up to $2.30 though, and a lot of sissy sellers have been taken out. Charts looking good. Interesting to see what happens from here given the very clear value in MRP at this price.

Where is the Paper Tiger?

They will know how much steam is left in the buyback...... right?

[Snow Leopard]

Where is the Paper Tiger?

They will know how much steam is left in the buyback...... right?

Yes, we knows it!

We knows it because we reads the precious notices, don't we...
Yes, and we reads all of each notice (https://nzx.com/files/attachments/192770.pdf).

No more nasty buy-backs!

Best Wishes
Paper Tiger

[axe]

Yes, we knows it!

We knows it because we reads the precious notices, don't we...
Yes, and we reads all of each notice (https://nzx.com/files/attachments/192770.pdf).

No more nasty buy-backs!

Best Wishes
Paper Tiger

Thanks PT,

I read the notice but didn't open the attachment. So silly.

[Snow Leopard]

Thanks PT,

I read the notice but didn't open the attachment. So silly.

Actually it is in the notice - at the bottom.

Best Wishes
Paper Tiger

[robbo24]

Actually it is in the notice - at the bottom.

Best Wishes
Paper Tiger

See you at 280 cents.

[axe]

Actually it is in the notice - at the bottom.

Best Wishes
Paper Tiger

Well, it has become apparent I cannot read well, so I'm glad for the Paper Tiger.

[Harvey Specter]

See you at 280 cents.wouldn't the buyback support the price, not hold it back? Please explain.

[robbo24]

wouldn't the buyback support the price, not hold it back? Please explain.

I agree Harvey, I didn't mean to infer otherwise...

Just saying the charts look good.

[robbo24]

Will be interesting to see whether the price holds up now the buyback has finished ... Or whether I should pocket the divie and 25c CG and run for the hills. :)

The last day of trading was without buyback support.

Tell me what you think? Looked pretty strong to me!

[robbo24]

Will be interesting to see whether the price holds up now the buyback has finished ... Or whether I should pocket the divie and 25c CG and run for the hills. :)

The last day of trading was without buyback support.

Tell me what you think? Looked pretty strong to me!

[Snoopy]

The power pylons you can see from your house marching across the Port Hills towards the Bromley sub-station carry wires that start at Manapouri.

At a presentation given by Patrick Strange the former CEO of Transpower during the time of uncertainty over the smelter someone asked if the Manapouri output became available to the general market would Transpower extend high voltage DC link futher south to Manapouri? Mr Stange said no because existing capacity was sufficient.


Thanks for this info Marilyn. There are a couple of points I would like clarification on though. Through some of my slightly lazy internet research.

http://new.abb.com/systems/hvdc/references/new-Zealand

we are told the DC link is a 610-km long inter-island HVDC transmission system, between Benmore substation on the South Island and Haywards substation north of Wellington.

Those power pylons marching across the Port Hills, as you put it, that you say come from Manapouri. All fair enough. But as they are north of the start point of the DC link at Benmore, I don't understand the relevance to Dr Patrick Stranges point, that you also quote, about the DC link being sufficient to transmit the Manapouri power North.

The relevant point as I see it, is how does the Manapouri power get to the Benmore node? What Dr Patrick Strange said can still be entirely true, even if no link between Manapouri and Benmore currently exists.

What got me thinking about this was the CEN monthly power data release for March 2014.

https://www.nzx.com/files/attachments/192636.pdf

The first few pages in this seem to be a picture of the entire power system, not just Contact. Page 6 shows a diagram of the GWh produced in the North island covering three years and alongside that the total GWh produced in the South Island excluding Tiwai (my bold). Why would Tiwai be excluded, which as I see it means by implication not relevant, if Tiwai is connected to the grid?

SNOOPY

[fish]

Turn to wikipaedia-
Manapouri is connected to the rest of the National Grid via two double-circuit 220 kV transmission lines. One line connects Manapouri to Tiwai Point via North Makarewa substation, north of Invercargill, while the other line connects Manapouri to Invercargill substation, with one circuit also connecting to North Makarewa substation. Another double-circuit 220 kV line connects Invercargill to Tiwai Point.[6]

but i am not sure why contact exclude Tiwai-is it because all of manapouri generation is contracted to tiwai ?

[Snoopy]

MRP relies on the Waikato river system for most of its generation-great when its wet but Waikato has a drought..
Taupo is nearly at its lowest limit.
I expect a prolonged period of high prices and I don't know how mrp will cope with this lack of generation and potentially having to buy power.
I know they coped last year-but taupo is near its low 2 months earlier this year

You wrote the above at the end of March, Fish.

Quoting from the Contact operational report for March (which nevertheless reports the state of the whole power market) on page 4.

"At 31 March, South Island storage was 79% of mean (28 February: 93%) and North Island storage was 52% of mean (28 February: 77%)"

Below that statement is a graph of Hydro storage. Within that graph is a line of actual storage and another comparative line of mean storage for any particular date you choose over a whole year. Look at the date of 31st March and you see something interesting.

Both North Island (substantially the Taupo catchment harnessed by MRP) and the South Island lakes are below their mean storage levels, as we already know.

The South Island storage was sitting at around 2200GWh as at 31st March.

The North Island Lakes were sitting at some 250GWh as at 31st March.

In absolute storage terms, the South Island storage capacity is an order of magnitude greater. So is a drought in the North Island catchment really an issue? I would argue not, because there is plenty of capacity in the south to 'flood the market' (sic) provided there is near to normal rainfall in the south. And if there is a drought in both islands, MRP now have a very substantial geothermal power reserve.

As an MRP shareholder, I suddenly feel a whole lot safer.

SNOOPY

PS



and rain looks unlikely to save them.


What a difference two weeks makes! From the same Contact March operational data:

"As at 14 April 2014, storage was:
– South Island: 69% of mean
– North Island: 61% of mean."

That represents a substantial inflow into the Taupo catchment in just a fortnight, with an equally substantial outflow in the south!

[fish]

I sure didn't expect so much rain.
glad you are feeling better about mrp
I am optimistic about population growth, I do like electric trains and cars and heat pumps.

[Marilyn Munroe]

T
The relevant point as I see it, is how does the Manapouri power get to the Benmore node? What Dr Patrick Strange said can still be entirely true, even if no link between Manapouri and Benmore currently exists.

SNOOPY

Benmore is connected to the South island grid by several AC transmission lines. These give the southern terminus of the HVDC link the ability to drag in power from other stations and send it north even if the Benmore Power Station is idle.

The line from Manapouri, which marches across the Christchurch Port Hills, stops off at the Twizel switchyard which itself has connections to Benmore. This is the most likely method of delivering electrons from Manapouri to the North Island via the HVDC link.

Boop boop de do
Marilyn

[Snoopy]

Benmore is connected to the South island grid by several AC transmission lines. These give the southern terminus of the HVDC link the ability to drag in power from other stations and send it north even if the Benmore Power Station is idle.

The line from Manapouri, which marches across the Christchurch Port Hills, stops off at the Twizel switchyard which itself has connections to Benmore. This is the most likely method of delivering electrons from Manapouri to the North Island via the HVDC link.


I guess I had a somewhat naïve impression of what the North South HVDC link was like.

From

http://new.abb.com/systems/hvdc/references/new-Zealand

we are told
"the DC link is a 610-km long inter-island HVDC transmission system, between Benmore substation on the South Island and Haywards substation north of Wellington."

I had the impression it was a single continuous cable poking out from Clifford Bay before striking shore near Petone before making the short leap to Haywards. But what you are saying Marilyn is that those power pylons marching across the port hills are in themselves part of the HVDC link?

SNOOPY

PS I see on further reading of my reference it answers my own question.

Length of DC submarine cables: 42 km
Length of DC overhead line: 575 km

[Marilyn Munroe]

But what you are saying Marilyn is that those power pylons marching across the port hills are in themselves part of the HVDC link?


No, the Port Hills transmission line is part of the AC South Island grid. This grid is also connected to the southern terminal of the HVDC link at Benmore. This gives the ability to use power produced at other South Island power stations to feed the HVDC link.

An example; Manapouri --> Twizel --> Benmore HVDC terminal -->(HVDC link) --> Heywards HVDC terminal --> North Island grid.

Boop boop de do
Marilyn

Definitions;
DC direct current
AC alternating current

[cyclist]

For those trying to get their head around the transmission network, the NIPS and SIPS diagrams on this page provide a single line diagram representation of the network: http://www.systemoperator.co.nz/documents/maps-and-diagrams

And on this page you can find geographical representations of the transmission network: https://www.transpower.co.nz/resources/maps-and-diagrams

[Harvey Specter]

No, the Port Hills transmission line is part of the AC South Island grid. This grid is also connected to the southern terminal of the HVDC link at Benmore. This gives the ability to use power produced at other South Island power stations to feed the HVDC link.

An example; Manapouri --> Twizel --> Benmore HVDC terminal -->(HVDC link) --> Heywards HVDC terminal --> North Island grid.

Boop boop de do
Marilyn

Definitions;
DC direct current
AC alternating currentThe lines are there but are they big enough to get the power (should Tiwai close) to where it needs to be?

[Snoopy]

For those trying to get their head around the transmission network, the NIPS and SIPS diagrams on this page provide a single line diagram representation of the network: http://www.systemoperator.co.nz/documents/maps-and-diagrams


Thanks for this Cyclist. From the South Island map I can see the DC link in purple marching from Benmore north but inland and bypassing Christchurch by going west of Hororata. As you go north the line is still just west of Waipara before it forges east north of Culverdon.

This is the line that Transpower has recently upgraded is it not?

The question that Harvey Spector just put is, what about the lines that are north/south of the Benmore node that feed the power to that node? It is the lines south that must carry the power from Manapouri to Benmore.

I see two parallel 220kV lines, each with double circuit towers, coming from Manapouri and feeding into the node at North Makarewa and also into Invercargill. But all that power feeds into the same system as all the rest of the South Island hydro system. So while it may be correct to say that the 350kv DC line could feed the power from Manapouri north, can it do so at the same time as feeding power from those other South Island hydro stations north?
That is the question that needs answering here is it not?

SNOOPY

[cyclist]

Snoopy, I don't know for sure, but I suspect after recent upgrade work that the HVDC has the capability to take any available excess.

If you look at the maps, I think it is likely that the constraint is north of Roxborough. i.e. without Tiwai, the only remaining significant southern load centre is Dunedin. Any Manapouri generation that is not needed for lower South Island load, will add pressure to the network carrying Roxburough and Clyde generation (and those closer to Benmore) north to Benmore/Christchurch (and beyond).

In the Meridian prospectus, on page 55 it states:

"If the Tiwai Point aluminium smelter were to close, the current transmission system operated by Transpower has the capacity to allow Meridian to supply the majority of Manapōuri’s generation capacity to the national grid and the wholesale electricity market. Transpower has advised that the transmission network between Manapōuri and the rest of the South Island could be upgraded and it expects such an upgrade to take three years to implement from commencement of the project. In Meridian’s opinion, under normal market conditions this upgrade would allow Meridian to supply a significant majority of Manapōuri’s generation capacity to the national grid".

These guesses seem to be supported by this article: http://www.nbr.co.nz/article/if-tiwai-point-smelter-shuts-no-problem-getting-power-auckland-ck-138278

i.e. some constraint in the 220 kV AC network only, but nothing major.

[Snoopy]

Snoopy, I don't know for sure, but I suspect after recent upgrade work that the HVDC has the capability to take any available excess.

In the Meridian prospectus, on page 55 it states:

"If the Tiwai Point aluminium smelter were to close, the current transmission system operated by Transpower has the capacity to allow Meridian to supply the majority of Manapōuri’s generation capacity to the national grid and the wholesale electricity market. Transpower has advised that the transmission network between Manapōuri and the rest of the South Island could be upgraded and it expects such an upgrade to take three years to implement from commencement of the project. In Meridian’s opinion, under normal market conditions this upgrade would allow Meridian to supply a significant majority of Manapōuri’s generation capacity to the national grid".


Thanks for that Meridian prospectus quote Cyclist (my bold). I think Tiwai have to give some years notice of a shut down. Three years is probably enough time with notice for Transpower to upgrade the lines north if Tiwai decides to go.



i.e. some constraint in the 220 kV AC network only, but nothing major.


The other thing that is on my mind is that we are transferring kilowatt hours (a unit of energy) not kilovolts (a unit of potential). The higher the volts the lower the amps you need to transport a given amount of power (kilowatts). IIRC that is the reason for a high voltage DC line in the first place. Lower the amperage to transmit a given amount of power and you minimise the energy lost in transportation of the power (the waste heat).

I mention this because that means a 350kV line can be 100% utilised to capacity with only a 220kV input. No doubt some of the power gurus on this forum will put me right if I have got that wrong!

SNOOPY

[mouse]

Thanks for that Meridian prospectus quote Cyclist (my bold). I think Tiwai have to give some years notice of a shut down. Three years is probably enough time with notice for Transpower to upgrade the lines north if Tiwai decides to go.

I mention this because that means a 350kV line can be 100% utilised to capacity with only a 220kV input. No doubt some of the power gurus on this forum will put me right if I have got that wrong!

SNOOPY

I think Snoopy, that a 220kV line can only be used at that voltage, or lower. Since a 350kV line requires much higher insulation design. However, the idea that it would take three years to build another power line is, frankly, laughable. It would take at least eleven years to get past The Greens, The Consents, The Landowners and the other power companies. It would only take six months to actually build the line, but this is NZ. Where things can be 'arranged' if desired.

[Harveyp]

SNOOPY, I would just like to point out, that the reason for high voltage is so the cross sectional area of the transmission line can be smaller, as you've already worked out, higher voltage lower the amperage. The reason you want a smaller cross sectional area of your cabling is.......... To make it cheaper to install. Smaller cables are cheaper.

Otherwise we'd have a bloody greatly expensive transmission system, with cables larger than the harbour bridge powering our little country. Just though i'd point it out, as i've seen it mentioned a few times.

Disc. Registered Electrician :)

[Harveyp]

Also that would mean, that you could not use 220kv on a 350kv line, as the lower voltage would have increased amperage, resulting in potential insulation breakdown. This is why we have small and large switching stations located around the country to switch from higher to lower and lower to higher. Hope that helps.

[fish]

Also that would mean, that you could not use 220kv on a 350kv line, as the lower voltage would have increased amperage, resulting in potential insulation breakdown. This is why we have small and large switching stations located around the country to switch from higher to lower and lower to higher. Hope that helps.
Big help
thx

[horus1]

The 350KV line is Direct current and the 220KV line is alternating current . You cant interchange them

[Snoopy]

I think Snoopy, that a 220kV line can only be used at that voltage, or lower. Since a 350kV line requires much higher insulation design.


Yes I think your view that a 350kV line requires much higher insulation than a 220KV line is correct mouse. However, I am not sure your assertion that a 220kV line can only be used at that voltage is correct. Why can't it be used at a lower voltage? Of course a lower voltage implies a higher amperage to transmit the same power. That in turn means more losses during transmission. So in practice, there would be no incentive to operate a 220kV line at a lower voltage. Unless that is, a line upstream or downstream in the power path was being repaired, meaning a lower voltage rating was applied to a whole longer power path for a limited period.

But this is getting away from my original point that a 220kV power path could completely fill a 350kV power path if the power is transmitted in the 350kV power path is at a lower amperage. Of course the converse probably does not apply.

A fully utilised 350kV power path could only go wholly into a 220kV power path if the 220kV power path took a much higher current. And that higher current would likely blow the 220kV insulation bringing power transmission to a halt.



However, the idea that it would take three years to build another power line is, frankly, laughable. It would take at least eleven years to get past The Greens, The Consents, The Landowners and the other power companies. It would only take six months to actually build the line, but this is NZ. Where things can be 'arranged' if desired.


I think that view is too cynical. Most of these power paths already have resource consent. Just upgrading existing equipment is unlikely to stretch into an eleven year project IMO.

SNOOPY

[Snoopy]

SNOOPY, I would just like to point out, that the reason for high voltage is so the cross sectional area of the transmission line can be smaller, as you've already worked out, higher voltage lower the amperage. The reason you want a smaller cross sectional area of your cabling is.......... To make it cheaper to install. Smaller cables are cheaper.

Otherwise we'd have a bloody greatly expensive transmission system, with cables larger than the harbour bridge powering our little country. Just though i'd point it out, as i've seen it mentioned a few times.

Disc. Registered Electrician :)

Thanks for the trade knowledge Harveyp. I agree with every point you have made in your post. But I would also add that a lower current also wastes less power as that power is transmitted. An extra benefit over and above those you mentioned.

SNOOPY

[Snoopy]

Also that would mean, that you could not use 220kv on a 350kv line, as the lower voltage would have increased amperage, resulting in potential insulation breakdown. This is why we have small and large switching stations located around the country to switch from higher to lower and lower to higher. Hope that helps.


Yes thanks for clarifying you can't simply plug one line into another without 'transforming' (sic) the current to match.

SNOOPY

[Snoopy]

The 350KV line is Direct current and the 220KV line is alternating current . You cant interchange them


No 350kV DC and 220kV AC are not interchangable, I agree. But you can use a transformer to adjust the voltage and an AC/DC convertor at each end of the DC line to adjust the form of electricity. That would allow a 220kV AC line from Benmore to feed into a 350kV DC cable, and allow 220kV AC to be pulled out of the other end at Haywards would it not?

SNOOPY

[horus1]

It doesn't work that wayI

[mouse]

No 350kV DC and 220kV AC are not interchangable, I agree. But you can use a transformer to adjust the voltage and an AC/DC convertor at each end of the DC line to adjust the form of electricity. That would allow a 220kV AC line from Benmore to feed into a 350kV DC cable, and allow 220kV AC to be pulled out of the other end at Haywards would it not?

SNOOPY
I think that is true Snoopy. Plus, I think that the cook strait crossing is AC, having been converted from the DC link. It may change back to DC on the other side, North Island, but I am not sure. I think the problem is Manapouri to Twizel. Plus then moving the extra power North, using existing cables that could be pretty full anyway.

[Snow Leopard]

Manapouri is operated by Meridian Energy, there are several threads for them.

Transpower operates the transmission grid in NZ, they have bonds listed on the NZ Debt Market so could start a thread in that forum.

And for those of you guessing stuff - just look it up will you!

Best Wishes
Paper Tiger

Disc: own MRP on the NZX and SPN on the ASX.

[Snoopy]

Plus, I think that the cook strait crossing is AC, having been converted from the DC link. It may change back to DC on the other side, North Island, but I am not sure.


Actually, no. From the 2013 pdf.

https://www.transpower.co.nz/sites/default/files/uncontrolled_docs/Fleet%20Strategy%20-%20HVDC.pdf

"The HVDC connection between the North Island and the South Island relies on three HVDC submarine power cables across Cook Strait. The submarine cables were installed in 1991, together with new cable terminal stations where the cables connect to the overhead HVDC transmission line."

SNOOPY

[Snoopy]

Manapouri is operated by Meridian Energy, there are several threads for them.

Transpower operates the transmission grid in NZ, they have bonds listed on the NZ Debt Market so could start a thread in that forum.


What I am interested in, a topic which is directly relevant to this thread, is what happens to MRPs business when there is a drought in the Taupo catchment? MRP could buy power from the Genesis Energy owned two older Rankine units in Huntly. Or MRP could buy power from South Island. That means from Genesis (Tekapo) and/or Contact (Roxburgh, Clyde) and/or Meridian hydro stations (including Manapouri). If Tiwai goes, there is suddenly mass overcapacity in the South Island.

Can the existing north south cable transmit this power up north to alleviate MRPs problems? The strict answer is yes, the HVDC cable technically has the capacity to handle the output of Manapouri.

From p2 of

https://www.transpower.co.nz/sites/default/files/uncontrolled_docs/Fleet%20Strategy%20-%20HVDC.pdf

"We will complete Stage 2 of the Pole 3 project as part of the originally approved Pole 3 Major Capex Proposal (MCP). The remaining work involves improving voltage stability through the addition of filter banks and a static synchronous compensator (STATCOM). This will increase the HVDC capacity to 1,200 MW. Stage 2 is due to be commissioned by 2014."

The practical answer is no, because all of those other South Island hydro generators will also be producing excess power with well filled southern lakes and the total power available to be exported north will overwhelm even the upgraded HVDC cable.

Manapouri is furthest from the Benmore node so is the least likely source of power to go north, all southern lake levels being equal.

SNOOPY

[Snow Leopard]

The basic market mechanism whereby generators bid to supply for the expected demand is, I thought, fairly straight forward. But a quick search on this wonderful internet thing should give you a few brief descriptions of how it works.

In addition the participants buy and sell CfDs to limit, to a degree, the risk of extreme (both high and low) prices.

And if you really want to get into it there are the Virtual Asset Swaps as well.

MRP has been operating in 'drought' mode for some time now.

All gentailers are basically continuously making decisions whether to supply more or less power into the market than they require to deliver to customers based on making the best use of their resources and profits.

Best Wishes
Paper Tiger

[Harvey Specter]

All gentailers are basically continuously making decisions whether to supply more or less power into the market than they require to deliver to customers based on making the best use of their resources and profits.My understading is that except for baseload (ie runs 24/7) they are constantly deciding, based on the spot price, whether to supple extra power (ie. run more wter through the turbine) or to save that stored capacity for when they need it to avoid having to pay a higher spot rate.

The stored capacity, whether it be water, gas or coal is never wasted.

[Snoopy]

The participants buy and sell CfDs to limit, to a degree, the risk of extreme (both high and low) prices.

And if you really want to get into it there are the Virtual Asset Swaps as well.


There is a section in the GNE prospectus on CFDs and Asset swaps in the elctricity market, that I am in the process of digesting. Be warned though, it gave me a headache the first time I read it. Those assets swaps were organised by the government to ensure a more competitive electricity market, before the recent floats. Yes they do have an effect. But MRP still has most of their generation in the upper North Island. The fact that they have a 'virtual share' of some of Meridian's South Island power doesn't alter the big picture. I am not convinced that factoring in a virtual power station in the South Island that makes up say 10% of MRPs generation is needed to understand the big picture for MRP. I may be proved wrong about that. But this puppy prefers to keep the analysis of power company shares as simple as possible to achieve my desired result.



MRP has been operating in 'drought' mode for some time now.


Good point. And haven't they done well!



All gentailers are basically continuously making decisions whether to supply more or less power into the market than they require to deliver to customers based on making the best use of their resources and profits.


As a power company investor, I don't believe that I need access to the day to day data feeds coming into the MRP data centre to maintain a suitable 'investment watch' on the company.

SNOOPY

discl: hold MRP

[percy]

The basic market mechanism whereby generators bid to supply for the expected demand is, I thought, fairly straight forward. But a quick search on this wonderful internet thing should give you a few brief descriptions of how it works.

In addition the participants buy and sell CfDs to limit, to a degree, the risk of extreme (both high and low) prices.

And if you really want to get into it there are the Virtual Asset Swaps as well.

MRP has been operating in 'drought' mode for some time now.

All gentailers are basically continuously making decisions whether to supply more or less power into the market than they require to deliver to customers based on making the best use of their resources and profits.

Best Wishes
Paper Tiger

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power?
A few years ago I noticed Trust Power sold a great deal more power than they generated.

[Snoopy]

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power?
A few years ago I noticed Trust Power sold a great deal more power than they generated.


I suspect the answer is, no one company gets the best of any other company over the longer term, all things being equal. But because all of our electricity companies have their own generating profiles most can influence the market for power by turning peaking power stations on and off, and in the case of MRP switching between Geothermal and Hydro to take best advantage of the water storage conditions. Lastly, some power generating companies have more power station capacity to turn on and off than others.

So despite what I said in line one of this post, all things may not be equal!

SNOOPY

[percy]

I suspect the answer is, no one company gets the best of any other company over the longer term, all things being equal. But because all of our electricity companies have their own generating profiles most can influence the market for power by turning peaking power stations on and off, and in the case of MRP switching between Geothermal and Hydro to take best advantage of the water storage conditions. Lastly, some power generating companies have more power station capacity to turn on and off than others.

So despite what I said in line one of this post, all things may not be equal!

SNOOPY

A very nice little [or huge] earner if you never have to deliver the power you have sold ?
Just need the knowledge that you could deliver?
Bit like banks playing the foreign exchange markets.
NB.The future markets trade approx one hundred times [or more] than the physical market worldwide,so all things are not equal.!!! lol.

[Snoopy]

A very nice little [or huge] earner if you never have to deliver the power you have sold ?
Just need the knowledge that you could deliver?


I think if you were a 'rogue trader' of power, the energy companies could change the market and kill you off.



Bit like banks playing the foreign exchange markets.
NB.The future markets trade approx one hundred times [or more] than the physical market worldwide.


Not for power though?

SNOOPY

[sharer]

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power? A few years ago I noticed Trust Power sold a great deal more power than they generated.

I think the answer might be Meridian. I also noticed Trust Power Percy. These points partly explain why MelCA and IFT are amongst the small number held at >5% in my portfolio.
But my own analytical abilities are very limited, and my capacity to sit up at the computer is declining. So this can only be an opinion, and i shan't hesitate to dump present favorites if future facts on actual performance seems to be proving me wrong. As an ordinary investor i can't spend all day trying to analyze everything that is hard.

[percy]

I think the answer might be Meridian. I also noticed Trust Power Percy. These points partly explain why MelCA and IFT are amongst the small number held at >5% in my portfolio.
But my own analytical abilities are very limited, and my capacity to sit up at the computer is declining. So this can only be an opinion, and i shan't hesitate to dump present favorites if future facts on actual performance seems to be proving me wrong. As an ordinary investor i can't spend all day trying to analyze everything that is hard.
It is in the too hard basket for me too.!!
Yet we as investors must be aware of it.
I tried to figure it out with CEN and TPW a few years ago and couldn't,yet came away from the exercise thinking TPW had the best traders.!!!,how much they earnt for TPW,I had no idea.

[percy]

I think if you were a 'rogue trader' of power, the energy companies could change the market and kill you off.



Not for power though?

SNOOPY

The power companies would not kill off their own traders.!!
Pork bellies,oil,wheat,silver,gold,power.All have markets.All traded.

[Snow Leopard]

I kind of gain the impression that some people have gained the wrong impression of the electricity market, possibly as a result of an interpretation of something I wrote. Sorry.

It is not a speculative market, it is a highly regulated market and bids and offers are not being made and pulled in the blink of an eye.

Everybody knows a couple of hours in advance how much electricity they will need to actually produce from each of their generation assets.

Best Wishes
Paper Tiger

5781
Source: http://www.emi.ea.govt.nz/

[fish]

[QUOTE=Snoopy;478831]I suspect the answer is, no one company gets the best of any other company over the longer term, all things being equal. But because all of our electricity companies have their own generating profiles most can influence the market for power by turning peaking power stations on and off, and in the case of MRP switching between Geothermal and Hydro to take best advantage of the water storage conditions. Lastly, some power generating companies have more power station capacity to turn on and off than others.

So despite what I said in line one of this post, all things may not be equal!

The system is evolving and working well and we havnt seen the massive spikes in prices that happened in previous years.
As a consequence mrp is coping well in this drought year-far better than I predicted..
As long as labour/Green can be kept out it looks like the future for delivering stable,competitively priced electricity will be bright for decades to come

[percy]

I kind of gain the impression that some people have gained the wrong impression of the electricity market, possibly as a result of an interpretation of something I wrote. Sorry.

It is not a speculative market, it is a highly regulated market and bids and offers are not being made and pulled in the blink of an eye.

Everybody knows a couple of hours in advance how much electricity they will need to actually produce from each of their generation assets.

Best Wishes
Paper Tiger

5781
Source: http://www.emi.ea.govt.nz/

Thank you for the links.
First word I saw was competitive.!!!!
As always happens in any highly regulated,full disclosure competive market [competition] there are winners and losers.
I guess the NZX could be described in similar terms,and there are winners and losers there every day.

[Snoopy]

So I must ask the question;Which power company has the best traders? Does that energy company make more out of trading, than generating the power?
A few years ago I noticed Trust Power sold a great deal more power than they generated.


I think you need to specify whether you are talking about a period of short term uncertainty , or something over a whole year. And the question is not whether a company sold more power than it generated, but whether it sold more power than it could generate. Buying power on market when it is for sale at below your own generating cost is logical and sensible.

But when you buy more power on market and you have more customers demand than you can generate for, that to me is a recipe for trouble. Transalta was killed off in New Zealand doing just that.

SNOOPY

[percy]

I am thinking more of something over a whole year,or years.Bit like the sharemarket where some do well while others don't.
I am certainly thinking of buying power on market when it is for sale at below your generating costs.
We see successful traders in any competitive market,but we have no idea which NZ power company has the top trader/traders.On the sharemarket we can see who the clever fund managers are,but we can not see who the sussesful EMI traders are.
May show up in some annual report as a staff member earning more than the CEO,then again it may not?
I do not have any answers as I have neither seen mention in any annual report of what I am questioning.
I did ask a Craig's analyst at a MRP presentation if he had any idea who or any if any company were making good profits from trading?After he got rid of the look of surprise he answered,that he did not think so.Did not seem to have much comfiction in his voice.!!!
You never know we may see a power company announce an earnings downgrade as a result of trading losses from EMI market.
There is more to generating and selling power,and that is trading it.

[rbel038]

Quarterly operations update out. Looks much as expected apart of the following.

Ngatamariki down 10MW due to steam decline in the reservoir it seems. Drilling a make-up well to come online later this year.

Southdown "under review" , wonder who is lining up to buy this thing then :). Would be a nice bit of cash to put into geothermal or fund some hydro upgrades. Unsure exactly how much this thing is worth second hand.

[Harvey Specter]

er review" , wonder who is lining up to buy this thing then :). Would be a nice bit of cash to put into geothermal or fund some hydro upgrades. Unsure exactly how much this thing is worth second hand.I would have thought no one would buy it. It would be mothballed.

[rbel038]

I guess thats one of the options they would consider, I always thought they would hand it off to either genesis or meridian in the future while they pushed ahead with developing the geothermal capacity they currently have consented.

Genesis I guess would be able to retire coal rankine units at HLY nearing their design life and meridian would actually get some thermal generation, along with exposure in the north island. I personally hope they just get rid of it at some stage, but can see the benefit in mothballing if we have dry years ahead

[Harvey Specter]

I think even National has a goal of 95% renewable electricity by 2025 (compared to the Greens 100% by 2020) so I think other companies would be relactant to buy. Best buyer is probably the government - dont they own a few for emergency backup?

[rbel038]

I think even National has a goal of 95% renewable electricity by 2025 (compared to the Greens 100% by 2020) so I think other companies would be relactant to buy. Best buyer is probably the government - dont they own a few for emergency backup?

Dunno but im sure there is enough hot air generated in the beehive to run a steam cycle

[Airw0lf]

I think even National has a goal of 95% renewable electricity by 2025 (compared to the Greens 100% by 2020) so I think other companies would be relactant to buy. Best buyer is probably the government - dont they own a few for emergency backup?

Govt. don't own any more "reserve" thermal units following sale of Whirinaki to Contact.

[mouse]

Has anyone ideas about the rise of MRP share price. Why?

[Master98]

Has anyone ideas about the rise of MRP share price. Why?
MRP still traded below its issue price $2.5, do you think it is abnormal to rise?

[Okebw]

Has anyone ideas about the rise of MRP share price. Why?

A few reasons I can think of. First, its undervalued, secondly, labours poor showing in the recent polls and thirdly a lot of the brokerages are rating it quite high. Craig's has it listed as a buy with a target price of $2.75

[robbo24]

A few reasons I can think of. First, its undervalued, secondly, labours poor showing in the recent polls and thirdly a lot of the brokerages are rating it quite high. Craig's has it listed as a buy with a target price of $2.75

Don't forget the buyback MRP carried out, accumulating a large chunk of stock to be held as treasury stock.

I think you'll find a strong correlation between Labour polling and MRP.

MRP also has its bonus share issue coming up next year. A lot of newbs sold out early so the Crown will have to do something with the shares it withheld.

Next divvy advice should be good :)

[Vaygor1]

Don't forget the buyback MRP carried out, accumulating a large chunk of stock to be held as treasury stock.

I think you'll find a strong correlation between Labour polling and MRP.

MRP also has its bonus share issue coming up next year. A lot of newbs sold out early so the Crown will have to do something with the shares it withheld.

Next divvy advice should be good :)

The buyback isn't over yet, but I think MRP have bought back about 95% of the maximum they intended to anyway.

I think the MRP share price is the perfect barometer for the election. $1.00 if Labour win. $3.00 if National win. More accurate than the polls anyway.

I think National's best asset, David Cunliffe, is doing his utmost to push MRP's share price up prior to election day by continually putting his foot in it.

[Harvey Specter]

MRP also has its bonus share issue coming up next year. A lot of newbs sold out early so the Crown will have to do something with the shares it withheld
Unlikely they would sell them in my opinion. Too much hassle (politically) for a small amount.

'Best' think would be to give to superfund when contributions restart.

[Okebw]

Unlikely they would sell them in my opinion. Too much hassle (politically) for a small amount.



I think I recall something about Macquarie/First NZ Capital having first right of refusal on any voided shares in the prospectus.
Though I don't think any price was specified.

[robbo24]

The buyback isn't over yet, but I think MRP have bought back about 95% of the maximum they intended to anyway.

I think the MRP share price is the perfect barometer for the election. $1.00 if Labour win. $3.00 if National win. More accurate than the polls anyway.

I think National's best asset, David Cunliffe, is doing his utmost to push MRP's share price up prior to election day by continually putting his foot in it.

The MRP announcement on 22 April says buyback is over. At the bottom.

[sb9]

Its been a painful year and a bit to see MRP lower than issue price, however as the IPO subscriber nice to see its heading close to issue price :)

[Vaygor1]

The MRP announcement on 22 April says buyback is over. At the bottom.

… and correct you are. A bit subtle of MRP to put it there instead of a stand-alone notice. Thanks Robbo

[J R Ewing]

And after the election?

I don't see much changing after the election, surely the market is pricing in the likely result already?

[lambton]

A few reasons I can think of. First, its undervalued, secondly, labours poor showing in the recent polls and thirdly a lot of the brokerages are rating it quite high. Craig's has it listed as a buy with a target price of $2.75

Along with MELCA and GNE, Craigs are promoting MRP to clients as shares currently trading below their target price. There might be something going on (hope so) but I think its purely catch up.

[Harvey Specter]

I don't see much changing after the election, surely the market is pricing in the likely result already?the election is closer than the polls suggest. National may have to rely on WinstonFirst and his policy is a govt buyback (I think, possibly via the superfund - he's vague at the bedtime of times).

I think there is still upside should National have a clean win.

[lambton]

the election is closer than the polls suggest. National may have to rely on WinstonFirst and his policy is a govt buyback (I think, possibly via the superfund - he's vague at the bedtime of times).

I think there is still upside should National have a clean win.


Mergers perhaps????

[Vaygor1]

the election is closer than the polls suggest. National may have to rely on WinstonFirst and his policy is a govt buyback (I think, possibly via the superfund - he's vague at the bedtime of times).

I think there is still upside should National have a clean win.

Even given the barest of odds that Labour could pull off an election win of any kind, their ridiculous power 'policy' (which they would never implement) would drive MRP share price down to easily under $1.50 through market sentiment, panic, fear, and traders doing their thing.

If (when) National wins, clean sweep or not, SP up to at least $2.75

Risk is a product of Probability & Consequence. The current share price reflects the fear of Labour's involvement post election … Probability is practically zero, perceived consequence.. catastrophic.

[Vaygor1]

Um ... Vaygor et al ...

My reference to the election was cynical jibe about how convenient it is for the share price to be heading up towards 2.50 (issue price) so that Key can say how "wonderfully" successful and how "well managed" the Govt's assets sales were.

It was not a statement on value. Nor was it a prediction of what would happen after the election. Nor is it asking what new information is in the public domain to justify this rise. Nor is it asking who is buying and what their reasons are.

Hi Belgarion. I didn't think any of my posts were specifically in response to yours, the others may have been but anyway, point noted. You are right though, the timing of MRP SP rising from under $2 is convenient for National, but I think it is more good fortune for them rather than deliberate manipulation or management.

[horus1]

The labour power policy is a very valid method of running a power system . Better than the present market arrangements.I am not political and have an in depth understanding of power systems and the NZ market having been a key player in setting it up . Put simply the present market has not worked as well as a centrally coordinated system for the majority of its customers.

[Snoopy]

The labour power policy is a very valid method of running a power system . Better than the present market arrangements.I am not political and have an in depth understanding of power systems and the NZ market having been a key player in setting it up . Put simply the present market has not worked as well as a centrally coordinated system for the majority of its customers.


I seem to recall in the dim distant past that champion of the free market, Sir Selwyn Cushing, saying pretty much what you are saying now horus, regarding the creation of Mighty River, Meridian and Genesis Energy to form the so called competitive NZ electricity market. Until that point only Contact was there to keep teh rest of the market honest. Mind you Sir Selwyn was chairman of the about to be dismembered Electricorp at the time. So he may have had a vested interest.

SNOOPY

[Vaygor1]

.. but I think it is more good fortune for them rather than deliberate manipulation or management.
Okay. Why do you think that?

Big increase from sub $2.00 to now? What makes you think it "good fortune"? Surely there's some non-political reason?

Just curious ... No answer required if you believe that fate, or "good fortune" as you put it, moves share prices. ;)

I meant deliberate manipulation or management by National.

But you know, on the topic of fate or 'good fortune' or perhaps a better word is luck (or bad luck)… the share price can move… depending on how you look at it.

I had made my mind up to buy PowerCo (PWC) the evening before 911 (NZ time). Well that event moved the share price alright. Couldn't figure out how this news was going to affect the NZ electricity market so over the next few days I threw everything into it. Would have to rate as one of my best buys ever.

[robbo24]

I meant deliberate manipulation or management by National.

But you know, on the topic of fate or 'good fortune' or perhaps a better word is luck (or bad luck)… the share price can move… depending on how you look at it.

I had made my mind up to buy PowerCo (PWC) the evening before 911 (NZ time). Well that event moved the share price alright. Couldn't figure out how this news was going to affect the NZ electricity market so over the next few days I threw everything into it. Would have to rate as one of my best buys ever.

Vaygor, I think you've got it the wrong way around.

The polling success of National is pushing the SP up. This is because the market fears the Red Threat of communist regulation of electricity generation, retailing, transmission, etc etc... Less chance of Soviet Russia control power derisks the investment causing greater potential upside.

In contrast to your proposition, that the MRP price will somehow affect polling (as a measure of party popularity). I think you've put the cart before the horse.

Sorry man but this Marxist conspiracy stuff just doesn't fly round here.

[Vaygor1]

Vaygor, I think you've got it the wrong way around.

The polling success of National is pushing the SP up. This is because the market fears the Red Threat of communist regulation of electricity generation, retailing, transmission, etc etc... Less chance of Soviet Russia control power derisks the investment causing greater potential upside.

In contrast to your proposition, that the MRP price will somehow affect polling (as a measure of party popularity). I think you've put the cart before the horse.

Sorry man but this Marxist conspiracy stuff just doesn't fly round here.

Not sure how you have interpreted my posts there Robbo, but from what I can gather, you and I are in complete agreement.

[robbo24]

Not sure how you have interpreted my posts there Robbo, but from what I can gather, you and I are in complete agreement.

My bad, I should have been lining up your friend belgarion for his leftist extremist posts.

[Vaygor1]

…. Also, my read of both Labour and Greens policies for the electricity market suggest many years to implement any changes and there'll be plenty of changes to current plans before the final version is implemented. And once implemented I don't see much change to the financials of MRP.

I very much agree with this part belgarion, However I do see market sentiment if a labour/green win should eventuate will cause a sudden and reasonably short-lived plunge in the SP. Be good time to buy some more.

However given labours polling together with the supremely-more-accurate-MRP-SP-indicator, I think the odds of this occurring are fairly remote. :)

[winner69]

A new phrase for Percy - apply a laser-sharp focus on business performance

Well said Joan and well done Mighty River

[robbo24]

A new phrase for Percy - apply a laser-sharp focus on business performance

Well said Joan and well done Mighty River

And well done to Paper Tiger for buying up at $1.90.

Well done to those who bought in at IPO and didn't sell.

Well done winner69 for posting.

[rbel038]

> Review of Southdown continues
> Marketing process complete and discussions still underway for possible divestment
> New virtual peaker commitment from Q4 FY2014 until at least the end of CY2015
> Reconfiguration options developed but implementation contingent on divestment discussions

Looks like they are trying to sell the plant first rather than mothball or continue to run. As i thought before the one of cash sale of southdown would be much better spent adding extra modules to ngatamariki and the like.

Great result in tough conditions for them.

[winner69]

Your CEO did not do a very good job in trying to explain that profits were not obscenely excessive and they had not price gouged retail customers on the radio his morning

He needs to be briefed how to handle these types of interviews or shut up

http://www.radionz.co.nz/audio/player/20146504

Retail prices are frozen he says a couple of times but then says they are down 4% this year, yeah right

Somebody has to stop this carry on, go Labour / Greens

[winner69]

I see your CEO is retiring

You deserve your retirement Doug, so long in his industry

Bet you was better in the good old days eh

[winner69]

"Better to own the bank than deposit money with them"

;)

But we need to be careful .....the easiest way to rob a bank is to run one

http://www.davidmcwilliams.ie/2014/07/31/beware-of-hedge-funds-bearing-gifts-the-easiest-way-to-rob-a-bank-is-to-run-one

[troyvdh]

Dear Winner...your comment "go Labour/Greens"...is that a p..s take.I thought Doug just spoke the facts ..albeit he was a bit grumpy/irritable.

As he said ..how many folk really believe if you "try and fix something"..through legislation (...Muldoon's price freeze ?????????)...will actually work.

But me thinks you are taking the mickey.Cheers

[RTM]

I thought it was great to hear what Doug said. A chief executive unencumbered by having to answer to his masters.
Brilliant ! Hope he has a great retirement.


Dear Winner...your comment "go Labour/Greens"...is that a p..s take.I thought Doug just spoke the facts ..albeit he was a bit grumpy/irritable.

As he said ..how many folk really believe if you "try and fix something"..through legislation (...Muldoon's price freeze ?????????)...will actually work.

But me thinks you are taking the mickey.Cheers

[spmcg]

Your CEO did not do a very good job in trying to explain that profits were not obscenely excessive and they had not price gouged retail customers on the radio his morning

He needs to be briefed how to handle these types of interviews or shut up

http://www.radionz.co.nz/audio/player/20146504

Retail prices are frozen he says a couple of times but then says they are down 4% this year, yeah right

Somebody has to stop this carry on, go Labour / Greens

The Electricity Authority report here (https://www.ea.govt.nz/about-us/media-and-publications/i-on-the-market/2014/18-retail-prices) indicates that price increases are from the regulated parts of the industry: transmission and distribution. The non-regulated (i.e., competitive) generation component of any prices increases is less than CPI. It appears unlikely a Labour/Green/other administration would alter this position for the better.

[cyclist]

The Electricity Authority report here (https://www.ea.govt.nz/about-us/media-and-publications/i-on-the-market/2014/18-retail-prices) indicates that price increases are from the regulated parts of the industry: transmission and distribution. The non-regulated (i.e., competitive) generation component of any prices increases is less than CPI. It appears unlikely a Labour/Green/other administration would alter this position for the better.

You see. There you go talking sense again. :eek2:

Unfortunately, common sense won't stop them making political capital out of it, if they think they can.

[robbo24]

Lol did someone accidently put an NZX shareprice buy order on the ASX listing yesterday?

I see the SP close at like 232 au and has since fallen back to where it was.

Hahahaha.

[Zaphod]

You see. There you go talking sense again. :eek2:

Unfortunately, common sense won't stop them making political capital out of it, if they think they can.

The most unfortunate part of this is that surveys of voters continue to show that they believe that the generators and retailers are to blame for the increases. It appears to be a case of not letting facts get in the way of a great [election winning] story!

[horus1]

Compare vectors report with MRP on both volume and future outlook. The distribution charges in AK have declined but not the consumer prices.i.e. The generator /Retailers have gobbled up the reductions for themselves.

[Harvey Specter]

Compare vectors report with MRP on both volume and future outlook. The distribution charges in AK have declined but not the consumer prices.i.e. The generator /Retailers have gobbled up the reductions for themselves.I believe trans powers prices have gone to eliminate any benefit from the reduction in distribution costs.

[horus1]

That is not true over a 5 year period.You only have to look at the profits of the generator /retailers compared with all distribution companies to see what has happened. Bring on the labour govt with some sensible electricity arrangements. NZ is to small with to much concentration of generation /retailing to have a market that works.

[horus1]

I was a senior figure in setting up the NZ Electricity market. It was turned down in initial studies because of the small size of the NZ market and it has been found to not work in practise . Costs are higher thanin the past and customers are being ripped of . It is not about the Wolak report.

[fish]

labour party regulation is a nightmare that will destroy investment and competition in this country.
transpower has invested heavily to ensure we have certainty of supply-as have lines companies keeping costs up .
Generators have also invested heavily and we are no longer so dependent on hydro .
In fact it is unlikely that we will need new expensive generation for a decade so prices will stabilize with intense competition.

[horus1]

Transpower has over invested . Loads are reducing and will continue to decline . Technology is driving major change in the industry The theoretical cost of generation is the short run operating cost which for hydro is close to 0

[mouse]

Transpower has over invested . Loads are reducing and will continue to decline . Technology is driving major change in the industry The theoretical cost of generation is the short run operating cost which for hydro is close to 0

Now, lets see. Generation costs close to zero. Lets say .05cents per kWh. Lets say we get allowed 20% mark up on that, so 0.01 cents per kWh. How much will the investors get? Or do we just get our cash back?

[Vaygor1]

I was a senior figure in setting up the NZ Electricity market. It was turned down in initial studies because of the small size of the NZ market and it has been found to not work in practise . Costs are higher thanin the past and customers are being ripped of . It is not about the Wolak report.

Hi Horus.

From your post, can you clarify just what was ‘turned down in initial studies’ and what was ‘found to not work in practise’ ?

In any event, you can be rest assured that the Labour's 'policy' is all about the Wolak report. It was the very foundation for it, and it is still cited by Labour:

Go to http://campaign.labour.org.nz/lower_power_prices and click on the Full NZ Power policy link at the bottom to open the pdf.
Go to page 7. The primary piece of evidence Labour quotes; the number 1 bullet point is the Wolak report and the very basis behind Labour's Single Buyer initiative. And since announcing this initiative, Professor Wolak has essentially condemned it, and there are links galore to prove it.

Nearly all of the the other evidence quoted in the 'policy' are either anecdotal, subjective, spin, statistical lies, and/or a farcical attempt at comparing little old NZ's case with Canada, UK, and the US.

Is the current system perfect? Of course not, no system is, but Labour’s insertion of a single-buyer middleman (ie another layer of complexity and more cost) will separate generation from retailing in the process and create 10 times more problems than it solves, all adding to even more additional cost. But don't take my word for it, ask Wolak.

[Harvey Specter]

Now, lets see. Generation costs close to zero. Lets say .05cents per kWh. Lets say we get allowed 20% mark up on that, so 0.01 cents per kWh. How much will the investors get? Or do we just get our cash back?On that basis, any investor with a rental house over 30 years old (ie. the mortgage should have been paid off) should only be able to charge rent to recoup maintenance costs?

Yout dont stop earning a return on captial just because you should have ('in theory') repaid the original cost already.

[Zaphod]

On that basis, any investor with a rental house over 30 years old (ie. the mortgage should have been paid off) should only be able to charge rent to recoup maintenance costs?

Yout dont stop earning a return on captial just because you should have ('in theory') repaid the original cost already.

Oh, but it's for the social good you know! Next we'll be imposing similar regulation on supermarkets and other "essential services".

[mouse]

Oh, but it's for the social good you know! Next we'll be imposing similar regulation on supermarkets and other "essential services".

We should also impose it on Egg and Bacon. Social Good, you know.

[troyvdh]

Dear horus....thanks for your posts....much appreciated...folks opinions here will differ ..that is the nature of the beast..consumers vs investors...you obviously have some insight that most of us do not have.I probably as most posters have to ST have are biased towards favouring the power companies because they are profitable...et al....it would be great to see what we are paying for power in say 5-10 years time.......any guess's....cheers

[horus1]

Thanks , troyvdh. I have been around the electricity Industry for a long time. Technology is hitting the industry badly overseas with generation values declining substantially. The cost of solar is coming down fast as are battery costs . The NZ market was not recommended in the 1990's by the Mclay committee but the politicians reworked it and a market was finally recommended. Domestic consumers have been badly ripped of . The overheads in the present industry are much higher than those in non market countries. There is a split between countries with a market system and those with a central supplier, for the consumers the central supplier model is better it is better for the country to. One of the factors behind industry leaving NZ is the volatile , high, electricity prices. When the market was introduced an option was progressive pricing which is what we should have adopted but it would have been better to leave it together as in ECNZ days.That was the time when the most benefit was delivered to NZ from this industry.
The sale of the Generators has been a disaster for this country.

[Hoop]

Thanks , troyvdh. I have been around the electricity Industry for a long time. Technology is hitting the industry badly overseas with generation values declining substantially. The cost of solar is coming down fast as are battery costs . The NZ market was not recommended in the 1990's by the Mclay committee but the politicians reworked it and a market was finally recommended. Domestic consumers have been badly ripped of . The overheads in the present industry are much higher than those in non market countries. There is a split between countries with a market system and those with a central supplier, for the consumers the central supplier model is better it is better for the country to. One of the factors behind industry leaving NZ is the volatile , high, electricity prices. When the market was introduced an option was progressive pricing which is what we should have adopted but it would have been better to leave it together as in ECNZ days.That was the time when the most benefit was delivered to NZ from this industry.
The sale of the Generators has been a disaster for this country.

Interesting balance of views here

horus1..my personal view is that NZ will eventually go the same way as overseas with declining values of generation...This will be passed on to the customer given time due to micro-generation competition via household/commercial photovoltaic self sufficiency...We are seeing the costs of solar photoelectric technology in a exponential decline thanks to nanotechnology and we are reaching a cost effective trigger point with silicone solar panels .. Technogy Revolution does not stop here as there's talk that not in the too far in the future newly built houses may come equiped with photovoltaic roof products which contain bedded inks or paint which may see silicone solar panels become an expensive outdated alternative...Other technology advances such as LED street lighting, low voltage appliances etc all going to point to electrical oversupply at some point in time..

I think the Opposition regulation of power pricing is 40 years too late ...this ongoing Technological Revolution is going to create a deflationary effect in this sector anyway and Labgreen regulation although very honorable may be less needed now than it ever was...it may even turn out be counterproductive as regulations tends to slow progress..

horus1 your expert views on this scenario???

Disc,,,have shares in GNE MELCA

[rbel038]

My understanding was that solar PV as a distributed national grid is going to have some serious frequency keeping problems. Generators output at pretty much 50hz, which is what our electronic devices depend on, each station has its own model that trans power as the system operator use to balance the grid.

with PV I don't see how the generators are going to lose out. I would foresee them providing more and more of a frequency keeping role to the grid, which the regulator is currently trying to establish a separate market for.

long term I ponder what will happen first. The prevalence of electric vehicles on our roads requiring substantial daily generation, or a rapid increase in solar PV. The Gentailers do substantially better in one of those cases.

[horus1]

I agree with you Hoop . The values are going to come down quickly and it will be customer choice not the need for connection. Batteries are coming as are fuel cells . It is not a good industry to be invested in on the retail side

[Harvey Specter]

It is not a good industry to be invested in on the retail sideRetail or generation? I assume the retailers,as opposed to the gentailers, will be unaffected provided they can still get customers and still hedge their energy costs.

[BlackPeter]

I agree with you Hoop . The values are going to come down quickly and it will be customer choice not the need for connection. Batteries are coming as are fuel cells . It is not a good industry to be invested in on the retail side

Are you sure, horus? Just inspire us - how much does it cost to generate a kWh with a large hydro generator ... and how much do you need to invest per kWh over the average lifetime of a private small solar system with battery backup? Last time I looked the solar system was still orders of magnitude more expensive. Not to forget all the heavy metals you first need to mine and afterwards to dispose for the solar / battery system. and don't tell the Greenies :scared:; Remember - not all of them are stupid!

[Aaron]

horus1..my personal view is that NZ will eventually go the same way as overseas with declining values of generation...This will be passed on to the customer given time due to micro-generation competition via household/commercial photovoltaic self sufficiency...We are seeing the costs of solar photoelectric technology in a exponential decline thanks to nanotechnology and we are reaching a cost effective trigger point with silicone solar panels .. Technogy Revolution does not stop here as there's talk that not in the too far in the future newly built houses may come equiped with photovoltaic roof products which contain bedded inks or paint which may see silicone solar panels become an expensive outdated alternative...Other technology advances such as LED street lighting, low voltage appliances etc all going to point to electrical oversupply at some point in time..

If oil becomes more scarce and expensive we might have a few more electric cars to push up demand. I guess maybe not in my lifetime. I don't like the Labour/Greens proposal as I own power company shares and like the idea of having solid investment alternatives to housing. Obviously if I didn't hold shares I would be more than happy to have lower power prices. Disclaimer hold MRP and sorry I chickened out on MELCA

[cammo]

Cheap Dino oil and CO2 pseudoscience will determine what happens here. If vehicles tend towards electric power the demand for power will eclipse our house drawn requirements hugely. Indeed if the climate soothsayers convince policymakers, vehicles will far surpass house consumption.Making some rough assumptions like a car needs 10KwH per day to drive to work and back I can only see consumption skyrocket and unless efficiency of solar panels gets past 30-50% (currently 13-16% ), a roof worth of solar panels aint gonna power your home and two cars! The battery tech I see as being more important than the solar development here as transport will consume bucketloads compared to house lighting and pushing refrigerant round pipes. China is subsidising their solar panel production to push economic development for many reasons...it will be interesting to see in ten or 15 years how many electric cars are on the road here. Indeed within a generation, dino juice sippers may be all but an expensive boys toy to annoy your neighbours with...let alone the CO2 tax bill that you have to stump up with at the pump to fill the tank. just my 2c and im a holder...how long till we get the bonus shares :)

[Jay]

May 2015 when the bonus shares are issued - if you held for 2 years??
Is the price likely to drop when issued barring everything else being equal, then hopefully climb back again - otherwise sort of negates the bonus issue - except of course the bigger dividend on the increased number of shares you now have.

[Harvey Specter]

Solar and electric cars aren't the perfect match because most cars are away from home while the sun shines. The car therefore can be used as solar storage.

Huge generalisation I know - esp since my wife is a stay at home mum and toy (gas guzzler) is parked at home 99% of the time since I bus to work.

[BlackPeter]

May 2015 when the bonus shares are issued - if you held for 2 years??
Is the price likely to drop when issued barring everything else being equal, then hopefully climb back again - otherwise sort of negates the bonus issue - except of course the bigger dividend on the increased number of shares you now have.
Not sure, whether I expect any impact on the share market when the bonus shares are distributed. Remember - these are not new shares (i.e. no dilution), but existing shares currently hold by the crown. Moving them to another owner shouldn't impact on the SP (unless everybody would try to sell them on the first day), it just moves some more future divvies from the crown to private owners.

[Harvey Specter]

Possible weakness after the bonus shares allocated as holders can now sell without losing their 'bonus'. Should only be minor.

There will be a bigger impact with MEL as holders need to access cash to pay for the balance of the installment receipts.

[mouse]

As I understand it, electric cars will be used as a giant energy storage system. So they are all plugged in for a charge, but are also available for 'top up' to the power grid from the vehicle batteries. So producing a situation where 'cheap' electricity can be stored at no cost to the electricity generators. This situation will of course require a very large take-up of battery powered vehicles.
The point then being that low cost hydro will be very profitable.

[macduffy]

As I understand it, electric cars will be used as a giant energy storage system. So they are all plugged in for a charge, but are also available for 'top up' to the power grid from the vehicle batteries. So producing a situation where 'cheap' electricity can be stored at no cost to the electricity generators. This situation will of course require a very large take-up of battery powered vehicles.
The point then being that low cost hydro will be very profitable.

Really? I can't imagine many car owners voluntarily draining their batteries for the good of the national grid and taking to their feet/bikes! Unless, of course, there's some huge monetary carrot offered to them to do so.

[Zaphod]

Really? I can't imagine many car owners voluntarily draining their batteries for the good of the national grid and taking to their feet/bikes! Unless, of course, there's some huge monetary carrot offered to them to do so.

Perhaps with demand based pricing, you could conceivably charge your car when KWh rates are low, and use any surplus charge left in the vehicle to offset higher KWh pricing during periods of peak demand. Taking this further, with micro generation you could conceivably generate power off your PV/wind turbine etc. off peak, store that energy in the vehicle, and then sell it back onto the network.

[Harvey Specter]

Perhaps with demand based pricing, you could conceivably charge your car when KWh rates are low, and use any surplus charge left in the vehicle to offset higher KWh pricing during periods of peak demand. Taking this further, with micro generation you could conceivably generate power off your PV/wind turbine etc. off peak, store that energy in the vehicle, and then sell it back onto the network.It could work - get home from work and you house drains the remains of your battery during the peak evening period and then recharges it overnight during the off peak period (using base load hydro and geothermal). The issue what if you want to use your car that night? Do you have to push a button each night to opt into it being drained (or opt out should you want to use it)? OK for plug in hybrids (which have an petrol engine back up) but not for full EV's. The fact is that most will be programmed to charge as fast as possible as soon as plugged in as that is the requirement to ease range anxiety.

[sharer]

Possible weakness after the bonus shares allocated as holders can now sell without losing their 'bonus'. Should only be minor.

There will be a bigger impact with MEL as holders need to access cash to pay for the balance of the installment receipts.

Yes, agree. But i'm not the only MEL holder probably to have provided ab initio for the cash call next year. For such holders the income impact just substitutes the then dividend for the relevant fixed bank rate. I expect a small uplift in income, but haven't considered tax adjustments.
The more important reasons to then reconsider investments across the Natsis flogged off group {MRP, MEL, GNE} and others such as VCT, TPW, IFT etc, remain much the same as originally, )& including the best proportionality to hold), imho.
Obviously political considerations come increasingly to require attention this month, and we need some inspired guesswork. A large issue close in time must be the proposal (LabGreen etc) to interpolate a state electricity sole-purchase & redistributing agency (which might also have price regulatory functions). Contrary to predictable political hysteria from some quarters, it seems many people, some fairly knowledgeable, think such ideas could, or might be, be good. Some current holders will most likely sell out or at least reduce holdings to avoid sp falls from such policies. I favour the view of others who believe that even if the govt changes after Sept 20th, any new govt would require time, probably several years, to establish such a new regime, & therefore it would be a mistake to rush any disinvestment decisions. During such an extended interval the other interesting developments with wind, photovoltaic and battery or distributed network technologies discussed in the intriguing posts above may instead come to the fore, as they are all progressing much more rapidly than most people think.
So it seems currently rational to hold, maybe for another year or two, as long as we are alert for any reductions in currently projected or anticipated dividend yields.
But with our NZ political system, i imagine there might be other ways in which a determined government, new or old, could possibly regulate to get consumer bills reduced; so it might also be rational to fear the possibility of another Chorus-type interference somewhere over the horizon...

[Disc. hold interests in all the companies mentioned]

[mouse]

Closed at $2.43 today. Almost to issue price. I am now in profit with both MRP and Meridian. And this with the election less than 2 weeks away. What situation After the election should National again be Govt?

[dingoNZ]

I would expect +10% within 60 trading days

[lambton]

Closed at $2.43 today. Almost to issue price. I am now in profit with both MRP and Meridian. And this with the election less than 2 weeks away. What situation After the election should National again be Govt?

The market for MRP and other power shares is saying National are a dead cert. Onward and upwards especially as we hit an inflation headwind.

[mouse]

I would expect +10% within 60 trading days
I agree. Certainty as opposed to ice cream cones.
They can get top heavy and Splat!!!!!!!!!!!

[rbel038]

Capex is tapering off as the last of the stations are built until demand picks up. MRP now moves into purely asset management, which in my opinion should provide returns for shareholders for the next 2 to 3 years if NZPower does not come into effect.

a lot of the recent adverts for personnel seem to suggest more of a focus on asset management. Together with the new structure it looks like leaner engineering resources now that the focus is shifting away from development

[robbo24]

Goodbye NZ Power.

Goodbye that particular element of risk.

[Vaygor1]

Goodbye NZ Power.

Goodbye that particular element of risk.

Yes robbo24. Couldn't agree more. Goodbye and good riddance to NZ Power.
A 'policy' slammed by the Stanford University Professor that Labour stole (and misinterpreted) the idea off and used as their #1 piece of evidence in their election campaign energy policy to justify introducing an extra monopoly called a 'single buyer' into the loop.
Three fascinating articles to back this up:

http://www.kiwiblog.co.nz/2013/08/wolak_says_labourgreen_energy_policy_bad_for_compe tition.html
http://www.stuff.co.nz/business/opinion-analysis/8989538/Labour-Green-electricity-poster-child-won-t-play-ball
http://www.scoop.co.nz/stories/BU1308/S00083/labour-greens-power-policy-is-bass-ackwards-wolak-says.htm


And well done Harvey Spector for this post 10 months ago:
http://www.sharetrader.co.nz/showthread.php?9357-MRP-Mighty-River-Power&p=444956&viewfull=1#post444956

I will be surprised if MRP's share price closes under $2.50 on Monday. Maybe even reach $2.60 or higher during intraday trading? I think NZX market in general will react very favourably this week coming due to the election result.

[Rabbi]

As a Labour party member I have to agree. I was absolutely gobsmacked at the Labour reaction to the MRP profit result, which had nothing to do with the power price, but included more one off gains. The trouble with Labour, is that they went left, with targeted policies such as parental leave, but left the ordinary single worker up the creek without a paddle . They don't realise that the proletariat in New Zealand doesn't exist like it once did in the past.
Most people are -in the words of Karl Marx- "bourgeoisie"ie.middle class battlers and small business owners, but this group, which pays most of the taxes, was largely ignored by Labour, at their peril!

[robbo24]

There's still the wider industry risk, tied in part to aluminum prices and Rio Tinto.

However, my interpretation of trading over the last few weeks is good dividend announcement and high national polling. Then it started to tick down as nervous nellies got out just in case all that twatwaffle with Nicki Hager did anything to the results.

My guess is that larger investors will adjust their risk profile and buy accordingly.

[Arbroath]

2.50 tommorrow for MRP, 1.50 for MELCA and 2.00 for GNE are my guesses. The clear cut election result removes a lot of risk. The NZ Power policy will be dead for good as the Nats will probably win again in 2017.

[Master98]

Both GNE and MELCA price rised over 25% issure price, I expect MRP price will be between 2.7 and 3.0(PE17.5~19.5) in coming week, let's see.

[Harvey Specter]

The clear cut election result removes a lot of risk. The NZ Power policy will be dead for good as the Nats will probably win again in 2017.Hopefully they won't flag that dead horse again - a solution looking for a problem. Small changes to the system would have achieved more.

[troyvdh]

Rabbi...very well said indeed.Yes it is truly shamefull that the nats do not have a credible opposition.Honestly its embarrassing...personal political debate is ...well quite worthless and quite inane..quite devoid of reality.....and yes this is probably the wrong forum to debate this.Cheers anyway.

[Vaygor1]

Posted 20-Sept-2014
Yes robbo24. Couldn't agree more. Goodbye and good riddance to NZ Power.
...
I will be surprised if MRP's share price closes under $2.50 on Monday. Maybe even reach $2.60 or higher during intraday trading? I think the NZX market in general will react very favourably this week coming due to the election result.

TaDaaaaaa...

6278

MRP Friday 19-Sept-2014 pre-election close $2.41
MRP Monday 22-Sept-2014 post-election close $2.59 (up 18 cents)
Intraday trading peak $2.63
:D

As Arbroath pointed out over the weekend, I expect MRP's Share Price to continue trending up for some time too.
MRP's $20 million share buyback ending around April 2014 averaging approx $2.13 per share is just another excellent board decision. 20% gain on $20 million in well under one year is pretty handy.

[sb9]

Got paid the divvy this morning thro' direct credit, very happy holder :)

[ratkin]

Got paid the divvy this morning thro' direct credit, very happy holder :)

Cant complain about the dividend yield, decent payout

[robbo24]

Lol why are people hating on MRP today?

Is this naive people selling after dividend payment, thinking they would otherwise not receive their dividend?

Or have I missed something?

[macduffy]

Motley Fool likes the look of MRP, despite the lack of tax benefits for Aussie investors.

http://www.theage.com.au/business/motley-fool/accessing-mighty-river8217s-golden-stream-20141008-10rwt3.html

A bit of a "once over lightly" analysis but may strike a chord with its readers.

[rbel038]

Motley Fool likes the look of MRP, despite the lack of tax benefits for Aussie investors.

http://www.theage.com.au/business/motley-fool/accessing-mighty-river8217s-golden-stream-20141008-10rwt3.html

A bit of a "once over lightly" analysis but may strike a chord with its readers.

The author also mentions something important which is that the forward focused statements on international geothermal seem to have all but gone since Doug H. stepped down as CEO. I agree with the view that they wont be able to compete against the big japanese investment houses like Sumitomo or Ormat in the international market. You would expect the allocated CAPEX for international development to then go elsewhere.. Maybe upping the divie?

[lambton]

And MRP keeps on moving up. Time for the knockers to get on the bus.

[Harvey Specter]

http://www.theage.com.au/business/rorting-in-the-power-industry-about-to-be-laid-bare-20141012-114y1o.html

I was wondering if the same thing happens in NZ - and if so, how long all the privatised power companies here will have before the jig is up in NZ as well.80,000 Aucklands would argue there has been no gold plating of the electricity network.

On a more serious note, the ComCom appears to be much stricter that their Australian counterparty. And remember this does not apply to Gentailers, only network companies so MRP etc not effected.

[MAC]

http://www.theage.com.au/business/rorting-in-the-power-industry-about-to-be-laid-bare-20141012-114y1o.html

I was wondering if the same thing happens in NZ - and if so, how long all the privatised power companies here will have before the jig is up in NZ as well.

I worked in the Australian energy sector for five years KW, albeit in the private generation sector, my dealings with Powerlink and Energex left me with an impression that from a new asset build perspective they invest with a reasonably well balanced level of engineering ‘plating’, similar to Transpower here.

I would be quite supportive actually if the operation of the grid in NZ was privatised or contracted but the asset and infrastructure decisions need to be made in the national interest and are best IMO centrally managed and should be publically owned just for that reason.

Commercially though there are all sorts of games played;

Did you know that Transpower don’t own billions of dollar’s worth of NZ transmission assets, they were sold abroad in 2003 and are cross leased back specifically for the purposes of tax avoidance.

[Harvey Specter]

Did you know that Transpower don’t own billions of dollar’s worth of NZ transmission assets, they were sold abroad in 2003 and are cross leased back specifically for the purposes of tax avoidance.Funny isnt' it. The failings of the SOE system when 100% government owned entities engage in (legal?) tax avoidance.

[dingoNZ]

Funny isnt' it. The failings of the SOE system when 100% government owned entities engage in (legal?) tax avoidance.

In no way, shape or form is this tax avoidance.

Their job is to run the company (SOE) as effectively as possible, if leasing assets provides better deductibility and tax position for them then it is the right move. Their job isn't to line the IRD's pocket, it is to perform their duty of energy infrastructure to the est of the ability. Its practiced daily in the private sector, why shouldn't the public sector be able to do it - its not against their mandate.

[horus1]

Transpower has never avoided the NZ tax only overseas taxes. Leaseing is a legitimate method of ownership and is used for aircraft and a number of other assets.

[Harvey Specter]

In no way, shape or form is this tax avoidance.


Transpower has never avoided the NZ tax only overseas taxes. Leaseing is a legitimate method of ownership and is used for aircraft and a number of other assets.I dont know the specifics of the deal so cant comment, though I do know some of those who were involved and they are very clever so assume it was all above board.

However, when you own an asset, lease it to someone else based in a tax haven and then reacquire it at a later point in time, my guess is the financial return is based around tax and one of the purposes of the transaction was therefore to avoid tax. However, my understanding it was US tax that was being avoided.

Quick google came up with this which I haven't read: http://www.nbr.co.nz/article/transpower-defends-foreign-property-leasing

This has no relevant to MRP so I will bow out.

[Snoopy]

http://www.theage.com.au/business/rorting-in-the-power-industry-about-to-be-laid-bare-20141012-114y1o.html

I was wondering if the same thing happens in NZ - and if so, how long all the privatised power companies here will have before the jig is up in NZ as well.

Quote from the above article:

-------------

In delving into how power companies calculate their costs, the terms of reference reflect the concerns of Sydney University professor of finance David Johnstone aired in Fairfax newspapers last month.

Johnstone revealed how the industry players ran rings around the regulators when it came to seeking approval for their high returns. Specifically, he exposed the DORC (depreciated optimised replacement cost) formula for valuing assets. DORC allows energy companies to value assets at "replacement cost" rather than at their actual cost. The upshot for customers is that they are effectively, in many cases, being billed again for something the public has paid for.

Thanks to DORC, a company is entitled to claim for assets whose costs already have been sunk. A gas pipeline for instance, decades old and already paid for, can be valued at the cost it might take to replace it – a cost David Johnstone says is "imaginary". Further, the number is arrived at with the help of consultants in whose interests it is to come up with a high figure.

---------

The above is exactly what MRP has done with all their hydro dams. It was exactly this kind of thing that the Labour/Green 'Kiwipower' policy was designed to unwind. Given the state of the combined Labour/Green vote, the 'jig' is set to continue.

SNOOPY

[MAC]

Certainly the way assets have been valued in NZ has historically been dubious at times too though, the worst I saw was the sale of the Clyde power project, it cost $1,4B to build, if I recall it was re-valued and flogged just a few years later at $540M, 40% to Edison and the rest in a public offering.

Then there were the annual ECNZ asset revaluations, always upward, and seemingly were set to match proposed asset group profit margins. Not sure the age of SOE’s was much better, MRP and MEL in particular having the older assets, especially after seeing what a spanking new hydro like Clyde was really worth at sale on market.

[Harvey Specter]

The above is exactly what MRP has done with all their hydro dams. It was exactly this kind of thing that the Labour/Green 'Kiwipower' policy was designed to unwind. Given the state of the combined Labour/Green vote, the 'jig' is set to continue.As the Gentailers aren't regulated, what asset values they have is irrelevant. They dont have to justify their asset values to anyone. Whether the assets are valued at $1, Market value or $10m is irrelevant.

The only people they need to justify their prices to are customers and if they are too high, they will change to another retailer.

[Vaygor1]

As the Gentailers aren't regulated, what asset values they have is irrelevant. They dont have to justify their asset values to anyone. Whether the assets are valued at $1, Market value or $10m is irrelevant.

The only people they need to justify their prices to are customers and if they are too high, they will change to another retailer.

You mean Gentaliers aren't government regulated.
Gentaliers are regulated, as you correctly point out, by competition. So it's all good. :)

[gv1]

Just a question on bonus share, was this for buyers who were in IPO or for those who bought in the market on the first day as well.

[couta1]

Just a question on bonus share, was this for buyers who were in IPO or for those who bought in the market on the first day as well.
Only in the IPO and held for 2 years gv1.

[gv1]

Only in the IPO and held for 2 years gv1.
Thank you Couta1

[sb9]

$2.75, Wow!!! big movement today...

[troyvdh]

...just thinking...I would love to have a beer with the bloke et al who bought 400000 shares today.

[Harvey Specter]

...just thinking...I would love to have a beer with the bloke et al who bought 400000 shares today.might have been your Kiwisaver provider. Have to put those funds somewhere.

[troyvdh]

Thanks Harvey....I wonder how many he bought at say 1.90.....no doubt the bloke is/was highly educated with all the right degrees etc....

Would the said Kiwi saver be interested in the yield or capital growth.....still thinking....

[Joshuatree]

suggest you buy that $6500 bottle of whisky at Duty free ,as a beer wouldnt just wouldnt cut it:)

[Joshuatree]

Sorry troy forgot the smiley face.

[troyvdh]

gee mate me thinks you've forgotten more than the smiley face...go well mate...

[BlackCross]

Mighty River Power shares have had a strong run up to $2.80, triggering a "reduce" recommendation from share analysts at Morningstar.

http://www.stuff.co.nz/business/money/10667291/Morningstar-issues-reduce-recommendation-on-Mighty-River-shares

[robbo24]

Morningstar... Lol. Such a good contrarian indicator.

MRP maybe an addition to an MSCI index? Ho ho ho. $3+ activated????

http://home.nzcity.co.nz/news/article.aspx?id=196223

[Baaarney]

and today's good news - a 5cps special dividend, with more updates on capital management due tomorrow at the ASM

******
MRP announces special dividend for shareholders Mighty River Power today announced a fully imputed special dividend of 5 cents per share to be paid to the Company’s more than 102,000 shareholders on 11 December 2014. Chair, Joan Withers, said the Board was pleased to declare a fully imputed special dividend worth approximately $70 million, which was confirmed as part of Mighty River Power’s ongoing capital management review at its Board meeting today.


“The positive outcomes we achieved in FY2014, along with our decisions around capital structure – including a successful $300 million Capital Bond offer – have given us some flexibility and options that have allowed us to pay this special dividend to our shareholders.”


Mrs Withers said the Company would be providing an update on capital management initiatives and Dividend Policy at the Mighty River Power Annual Shareholders’ Meeting tomorrow (6 November 2014).
ENDS


Notes:
- The fully imputed special dividend of 5.0 NZ cents per share will be paid on 11 December 2014 to all Mighty River Power shareholders who are on the Company’s share register at 5pm on the record date of 20 November 2014.
- The dividend will be fully imputed which amounts to an imputation credit of 0.019444 NZ cents per share.
- The Company will also pay a supplementary dividend of 0.008824 NZ cents per share to non-resident shareholders. The Company will receive from the IRD a tax credit equivalent to the supplementary dividend.

[robbo24]

Mighty River Power shares have had a strong run up to $2.80, triggering a "reduce" recommendation from share analysts at Morningstar.

http://www.stuff.co.nz/business/money/10667291/Morningstar-issues-reduce-recommendation-on-Mighty-River-shares

How did the almighty Morningstar not calculate the potential for a special dividend to the tune of $70m in their almighty calculations?

Oh that's right, contrarian indicator...

:D:D:D:D:D:D:D:D:D

MSCI announcement next, goodbye $3.00.

:D:D:D:D:D:D:D:D:D

[BFG]

Congrats to all shareholders holding through thick and thin (and buying more near $2.00!). Benjamin Graham would be proud of all of ya!

[bunter]

When you take the bonus shares, and the dividends into account, the paper loss was never that bad. Bunter 'fair value' is 3.21 FWIW, assuming 7.5% long term growth.

[dingoNZ]

Mighty River Power shares have had a strong run up to $2.80, triggering a "reduce" recommendation from share analysts at Morningstar.

http://www.stuff.co.nz/business/money/10667291/Morningstar-issues-reduce-recommendation-on-Mighty-River-shares


Morningstar research is utter rubbish

[BFG]

mighty river power shares have had a strong run up to $2.80, triggering a "reduce" recommendation from share analysts at morningstar.

http://www.stuff.co.nz/business/money/10667291/morningstar-issues-reduce-recommendation-on-mighty-river-shares
buy more now

[tim23]

Think that's why Contact has firmed of late, very likely to also pay special dividend.

[IAK]

With Meridian and Contact reducing the solar buyback rates, it now seems far more sensible to invest in the power companies and use the dividends to subsidise the power bills.

[bull....]

With Meridian and Contact reducing the solar buyback rates, it now seems far more sensible to invest in the power companies and use the dividends to subsidise the power bills.

makes the whole financial argument around getting solar even less so

[blackcap]

Apart from demand being greater than supply, does anyone know what is going on today? They have just hit $3.15

[gv1]

I think M/fool... aussies buying up large.

[macduffy]

I think M/fool... aussies buying up large.

....and it's a bullish market overall.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11356672

[gv1]

....and it's a bullish market overall.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11356672

yes, of course. Thanks macduffy.

[Zaphod]

makes the whole financial argument around getting solar even less so

Yes, agreed. It may still make sense for area where power supplies are either non-existent or unreliable, where PV/Wind turbines/etc. can be purchased relatively cheaply, or where the owner just wants to be self-sufficient and to heck with the cost!

[McGyro]

I don't understand why the power companies would want to antagonize comcom like this. Very shortsighted action, in my view because they are almost forcing the governments hand on energy, warming etc.

[Arbroath]

I don't understand why the power companies would want to antagonize comcom like this. Very shortsighted action, in my view because they are almost forcing the governments hand on energy, warming etc.

Imagine you're commenting on the solar power price cuts. I don't see why the power companies should have to pay anything - if a residential user wants solar then go for it but what right does anyone have to force a power company supplier to buy their power. It has to go back across lines on the grid and be redistributed. If Meridian etc want to pay for it on a commercial basis then fair enough but how does one persons choice to go solar equate to a right to force a company to buy your surplus energy. I can't make a supermarket buy my extra tomatoes from the back garden just because they sell a shed load of tomatoes to everyone.

And before people have a crack we've looked a t putting in solar a couple of times and I'm all for it once the economics stack up but I wouldn't factor in anything for forcing surplus power back onto the grid...

[Harvey Specter]

I don't understand why the power companies would want to antagonize comcom like this. Very shortsighted action, in my view because they are almost forcing the governments hand on energy, warming etc.they are now paying the average wholesale rate rather than more than they could buy it for on the wholesale market. Everyone who is complaining, including that little Sh!t Hughes knows this but is deliberately misleading the public. They want the solar feed in rate to be subsidised to encourage uptake. But a subsidy is making everyone else paying for you investment.

[horus1]

That ignores the fact that by redistributing locally the big retailers avoid transmission fees. With costs reducing for solar and batteries fast and energy from other sources going up the way of the future is with the customer not the retailers.

[Harvey Specter]

That ignores the fact that by redistributing locally the big retailers avoid transmission fees. With costs reducing for solar and batteries fast and energy from other sources going up the way of the future is with the customer not the retailers.True it does avoid transmission fees but not distribution fees. But that is irrelevant as Transmission is a pass through cost. Anyway, surely this just means you should be calculating based on the average spot rate at the closest GXP? Complicated area (so I probably have it wrong) - keep it simple - if you are buying power generation the same costs should apply whether it is from a large hydrodam, windfarm, gas generator or a small solar, wind turbine. That price is the spot wholesale rate.

There is also additional metering costs (a second meter is needed - it doesn't run backwards), admin costs (an invoice must be created and posted/emailed), and profit (nothing is free).

[Schrodinger]

Great run on the stock recently grats to all the winners.

[horus1]

Transmission is a cost to get the remote generators power to market. It should not be charged to local generation. As batteries arrive more and more of the transmission will be redundant. at present the changes by the retailers will only drive a negative attitude to the electricity industry by the public and later many will leave it , 2-3 years.

[Biscuit]

Transmission is a cost to get the remote generators power to market. It should not be charged to local generation. As batteries arrive more and more of the transmission will be redundant. at present the changes by the retailers will only drive a negative attitude to the electricity industry by the public and later many will leave it , 2-3 years.

Negative attitudes probably don't drive consumer electricity choices. There is unlikely to ever be significant govt subsidy for residential solar power in NZ as we already generate most of our power with renewables. Without subsidy, home PV is unlikely to compete with large scale generation in the foreseeable future.

[Harvey Specter]

Transmission is a cost to get the remote generators power to market. It should not be charged to local generation. As batteries arrive more and more of the transmission will be redundant. at present the changes by the retailers will only drive a negative attitude to the electricity industry by the public and later many will leave it , 2-3 years.And it isn't. Those with Grid tied solar only pay transmission and distribution charged on electricity they consume from the network. They dont get charged transmission/distribution charged on power they sell back to the network.

Are you saying that the retailer should give a rebate for 'avoided transmission costs' as they can sell your power to your next door neighbour? Again, if they use the spot rate at the closest GXP, then they should be using the right rate?

[Biscuit]

.... home PV is unlikely to compete with large scale generation in the foreseeable future.

or more to the point, home power generation is unlikely to ever compete with large scale generation.

[horus1]

I was at the front of the theory of transmission pricing . The fallacy is that the consumer not the supplier should pay for it. It would and is better to have local generation distributed, look overseas.Local generation is competing with remote generation now.At 30c/kwhr it is cheaper to do your own , that is why loads are declining when GDP is increasing.Have a look at the p/e's on these electricity cos , they are exorbitant.

[Harvey Specter]

I was at the front of the theory of transmission pricing.
Can you answer this then. Networks have to be built for peak demand. To the extent a solar user is using the network during peak, but not during mid peak, aren't the freeloading a bit? (I realise it is similar to someone who is only home during night hours only but aren't the making it worse by having negative demand during the day, as oppose to minimal demand).

I agree that solar is very close to being economic, and as batteries become cheaper, the peak shaving ability will have real network benefits.

One difference is we have relatively low cost generation due to the old dams don't we?

Re Gentailers, they are in a competitive market - similar to petrol stations ;)

[horus1]

I agree about the peak BUT the trouble is that the gen/retailers are overcharging the small customers as they have little competition on them. the marginal station is thermal or geothermal and that is what they all get paid for.In the finish it will come down to customer choice and a lot of customers will elect to go independent or in small local groups. Batteries change the whole nature of the electricity industry. these are my thoughts and they may be wrong , it will probably take 3 years before the affects start to show. I haven't bought any of the SOE,s and have been wrong so far.

[Biscuit]

Seems unlikely to me that any significant number of customers would choose to "go independent or in small local groups". Personally, I'd happily pay extra to a large gentailer just to avoid horror of having to deal with a small local group or some kind of independent supply and I'd guess that would be true for most people.

[RTM]

I think we're perhaps getting to hung up on using solar to generate electricity.
For many folk a huge amount of power is used to heat water.
Put in a solar system to heat your water and you will enjoy large power savings without needing to engage the power companies.
We have one, it works a treat.
Cheers
RTM.

[Biscuit]

I've previously had solar hot water and it was great. Solar hot water has been cost effective for years. How many people have these installed even in new houses? Neither solar hot water or home PV will be disruptive technology for power generators because people will not install them in significant numbers.

[BFG]

If todays downtrend continues and MRP closes lower then a covered spinning top (denoting indecision in the market) reversal has been confirmed. Looks overbought near-term, time for a breather imho. Index inclusion may give it another leg up in weeks to come. Still a great hold for those who bought nice and low or before /after elections! :)

[couta1]

j todays downtrend continues and MRP closes lower then a covered spinning top (denoting indecision in the market) reversal has been confirmed. Looks overbought near-term, time for a breather imho. Index inclusion may give it another leg up in weeks to come. Still a great hold for those who bought nice and low or before /after elections! :)
Oh really Mr Moose i thought it just mearnt it was time to use some play money to buy a parcel to snatch the upcoming special divvy and then to dispatch it again:cool:

[BFG]

Always nice getting a special divvie! It looks like the run up is over but I would be surprised if she went below $3.00 again with index inclusion and that divvie up soon. Follows the US markets with investors seeking div yields and returns over growth.

[macduffy]

Here's an Aussie who's keen on MRP!

http://www.thebull.com.au/premium/a/50163-ideal-defensive-stock-for-yield.html

[Arbroath]

sold 50% of my MRP today at $3.08 - I love how bulled up the bull is above $3. Was a pretty weak buy recommendation they had in March - "slightly undervalued" - up 40% since then...but fair cop to them, at least they had a weak buy rather being scardy cats like a lot were to see them fall under $2. My personal electricity pick is GNE as the gas lasts much longer than a conservative prospectus will ever recommend.

[robbo24]

Not long until 25 November, when MRP is added to the MSCI global standard index... http://www.msci.com/eqb/gimi/stdindex/MSCI_Nov14_STPublicList.pdf

:D

[dingoNZ]

27th November our time, its effect 26th US time

[Master98]

morningstar has lift MRP fair value to $2.9.