Mighty River Power : Quarterly Operational Update for the Three Months ended 31 March 2016

20 April 2016

QUARTERLY HIGHLIGHTS
• 43% of Mercury residential customers on fixed-price contracts • 98% geothermal availability for the last two quarters • 0.5% increase in electricity demand - the seventh consecutive quarter that demand has increased on pcp
CUSTOMERS ON FIXED-PRICE CONTRACTS NOW 43%; COMMERCIAL VOLUMES UP The proportion of Mercury Energy residential customers on fixed-price contracts increased to 43% during the period due to more than 28,000 customers taking up a two-year offer in preference to an increase in energy pricing. The lift in overall sales volumes reflects higher commercial contracting activity as yields temporarily improved. The average electricity energy price to customers was $110.10/MWh, 1% lower than pcp due to the yields for new commercial contracts being below those that are currently rolling off. As previously communicated, a large proportion of these higher-priced contracts were secured between FY2011 and FY2013.
HYDRO GENERATION UP ON PCP; WHOLESALE PRICES DOWN The quarter to 31 March reflected a 19% lift in hydro generation up 136GWh to 843GWh.

High national hydro storage, which ended the period 10% above average, continued to impact wholesale prices. The price the Company received for its generation was down 27% on pcp to $67.91/MWh.

Relative hydro yields (GWAP) continued to trend below historical levels for the nine months ended 31 March, being 1.04 against average base-load prices (TWAP). This compares with 1.08 for the pcp and was due to a flatter generation profile in response to lower wholesale price volatility. A return to historical hydro yields is not expected to fully translate through to LWAP/GWAP due to the normalisation of relative purchase prices (LWAP) that are also influenced by price volatility, as well as locational price differences.

Strong geothermal generation was again the result of 98% availability for the Company's geothermal plants for the quarter, up 2% on pcp. Planned outages across the year can cause reported generation to fluctuate depending on timing.

Mighty River Power has completed the sale of Southdown's four gas turbines, with the balance of the plant, including generators, remaining onsite with the capability to provide voltage support to Transpower.
NATIONAL DEMAND GROWTH CONTINUES - RECORD FOR Q3; ASX PRICES EASE
Throughout the quarter, ASX futures prices decreased for each year from FY2016 to FY2019 despite improvement in supply and demand fundamentals. This creates pressure on yields for commercial and industrial contract renewals.
National demand for electricity rose to the highest level for Q3 on record, up 0.5% compared with the same period last year (adjusted for temperature). This is the seventh consecutive quarter where demand has increased on pcp, with the current quarter increase showing broad-based growth.
Mighty River Power will release its financial results for the 12 months ended 30 June 2016 on 23 August 2016

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