State-controlled power companies more than double their profits to $ 1.35b

Big electricity companies are back under the spotlight after a bumper profit season.

Neville Marriner / Stuff

Big electricity companies are back under the spotlight after a bumper profit season.

Meridian Energy has increased its annual profit by 55% to $ 664m.

The company is the last of the major power companies to report its results for the year.

Mercury and Genesis, which like Meridian are 51% government-owned, also reported big profit jumps over the past two weeks.

The combined profits of the three firms in the year to the end of June totalled $ 1.35b, up from $ 601m last year.

Their operating profits also rose significantly, but at a slow pace, from $ 1.51b to $ 1.73b.

READ MORE:
* Genesis Energy signals January price rise despite 600% profit jump
* Mercury annual profit triples after sale of Tilt shareholding
* Contact Energy bucks the trend with small dip in annual profit

Deborah Hart, chairperson of the Consumer Advocacy Council, said consumers wanted reliable and sustainable electricity into the future, “but they also want fairly priced electricity”.

The council was established with the support of the Government this year to advocate for the interests of consumers and small businesses in the sector.

“It is jarring in the week that Genesis posted a 600% increase in profits that it also said that its customers can expect a price increase for their electricity,” Hart said.

“The Consumer Advocacy Council hopes that in times of increased inflation, when consumers are facing rising bills, that electricity retailers will take great care when considering the price of electricity for their customers,” she said.

Consumer Advocacy Council chairperson Deborah Hart described Genesis' announcement it was planning to raise prices in January as' jarring '.

ROBERT KITCHIN / Stuff

Consumer Advocacy Council chairperson Deborah Hart described Genesis’ announcement it was planning to raise prices in January as’ jarring ‘.

Hart noted other companies had also posted significant annual profits.

“We believe price increases need to be justified and proportionate to their costs and capital requirements and we will be watching closely to ensure this is the case,” she said.

Hart said the council was planning to conduct a survey of the sentiment of power users and would soon “better know what consumers think about the prices and services they receive”.

Meridian said its profit for the year was boosted by a $ 214m gain on the sale of its Australian business and by a $ 281m rise in the value of “hedge instruments”.

Genesis also reported a large increase in the value of its derivative contracts, which reflected an increase in forward pricing for electricity on the wholesale market.

Meridian chief executive Neal Barclay said it had “a challenging, but successful year”.

“We’ve navigated another significant drought, grown our customer base, built out our development pipeline and maintained momentum on the construction of our Hawke’s Bay wind farm – Harapaki,” he said.

The company announced a 3% increase in its dividend and said it “continued to focus on customers first”, including through an Energy Wellbeing program to assist vulnerable customers.