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2012-01-18 - 03:54:00 - DJ INTERVIEW: Mighty River Power CEO: On Course For 2012 Generation Targets
 

*DJ Mighty River Power CEO: On Course For 2012 Generation Targets


(MORE TO FOLLOW) Dow Jones Newswires

January 17, 2012 22:53 ET (03:53 GMT)

*DJ Mighty River Power CEO: Geothermal Strong, Hydro Helped By Good Rainfall


(MORE TO FOLLOW) Dow Jones Newswires

January 17, 2012 22:53 ET (03:53 GMT)

*DJ Mighty River Power CEO: Off-Shore Geothermal A Potential Growth Area For Company


(MORE TO FOLLOW) Dow Jones Newswires

January 17, 2012 22:53 ET (03:53 GMT)

*DJ Mighty River Power CEO: Customer Churn Stabilizing


(MORE TO FOLLOW) Dow Jones Newswires

January 17, 2012 22:53 ET (03:53 GMT)

DJ INTERVIEW: Mighty River Power CEO: On Course For 2012 Generation Targets

-- First in line to be privatized; sale expected in third quarter

-- Geothermal performing strongly, hydro helped by good rainfall

-- Off-shore geothermal a potential growth area for company

-- Customer churn stabilizing


   By Lucy Craymer
   Of DOW JONES NEWSWIRES

WELLINGTON (Dow Jones)--With plentiful water supplies and customer turnover off its peak, things are running to plan at energy generator Mighty River Power Ltd., according to the company's chief executive, Doug Heffernan, whose company will be the first to be partially floated in the upcoming round of privatizations in New Zealand.

"On the generation side of the business things have been tracking pretty much to plan and the same's pretty much true on the retail side of things," Heffernan told Dow Jones Newswires in a phone interview.

The state-owned asset is in the spotlight after being ear-marked to lead a round of sales that the government hopes will raise NZ$5 billion-NZ$7 billion (US$4 billion-US$5.6 billion). The sale of a 49% stake is expected in the third quarter of 2012.

The government also plans to reduce its holdings in Meridian Energy Ltd., Genesis Energy and Solid Energy New Zealand Ltd. to 51% from 100%, and will cut its stake in Air New Zealand Ltd. (AIR.NZ) to 51% from 76%.

Much of the success of future sales will rest on the returns investors make from Mighty River Power, and the company is likely to have been chosen for its history of stable income, its focus on popular renewable energy sources and its growth potential in offshore markets.

Heffernan said good rain in the central North Island was helping its hydro facilities, while geothermal was performing "strongly."

"Perhaps compared to some of the other hydro generators, we're probably in a slightly better position and we've been tracking better than most, particularly South Island dominated generators," he said.

Although wholesale prices are likely to remain flat, customer churn has stabilized somewhat since its peak in August, although they do remain above levels 12 months ago, Heffernan said.

"It's hard to say (whether churn will reduce further)," he said. "I think the reality is as a retail market and an end-user market, it (New Zealand) is a very dynamic one and there are quite a number of players by industry standards all looking to jockey for position in a very flat market."

Mighty River Power already has offshore interest in joint-venture geothermal developments in Germany, Chile and the U.S., and this is seen as providing growth potential for the company.

"We are seeing an awakening in geothermal (interest), including in countries like Chile where there are no geothermal power stations yet but significant geothermal reservoirs," Heffernan said. "We see that as a potential growth area for the company given that we've got experience and there are not that many operators globally with that experience."


-By Lucy Craymer, Dow Jones Newswires; +64-4-471-5990; lucy.craymer@dowjones.com


(END) Dow Jones Newswires

January 17, 2012 22:54 ET (03:54 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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