Highlights for December and January

• National storage levels remain below seasonal average
• Lower South Island inflows in early January improved South Island storage
• Spot prices moved higher in December before dropping in January
• Temperatures were above historic average

Spot Market Prices

Spot prices continued to move higher through December with daily average spot prices reaching 17.28 c/kWh in Auckland.  The return of some thermal generation availability at the end of December combined with the reduction in demand for electricity saw prices reduce over the Christmas – New Year period.  Hydro generators are continuing to use water conservatively which is maintaining upward pressure on prices.

The national average monthly spot price was 11.26 c/kWh in December and 9.16 c/kWh in January compared to 10.16 c/kWh in November 2005.

Average Daily Prices

Hydrology

National Storage

North Island storage levels have remained above average throughout December and January.  South Island storage levels finished the year at approximately 40% full or 60% of average for that time of year.  Although we saw strong recovery in South Island lake levels in the first two weeks of January inflows have receded to leave national storage at 63% full or 84% of average for this time of year.

Outlook

Prices are expected to stay firm through February due to lower than average storage levels.