Mighty River Power is investing more than $1 billion to develop some 400MW of new geothermal generation capacity over the next five years.

Announcing the company’s annual result for the year to 30 June 2007, Mighty River Power Board Chair, Carole Durbin said the geothermal development programme, spearheaded by the construction currently underway of a new $300 million, 90MW plant, at Kawerau, was a key plank in its strategy of maintaining a diverse generation portfolio to ensure security of supply.

Ms Durbin said Mighty River Power was continuing to explore other generation opportunities but regarded geothermal as its number one development priority.

“With geothermal, we have a fuel that is reliable, efficient, and requires less transmission. Mighty River Power is determined to continue working to harness that for the benefit of all New Zealanders.”

Ms Durbin said the company’s focus on helping to meet New Zealand’s future electricity needs was reflected in capital expenditure for the past year of $183.5 million, a 24 percent increase on the previous year.

Investment in new plant had seen the value of Mighty River Power’s assets grow by $174 million to $2.88 billion.

Overall, Ms Durbin said, Mighty River Power had a strong year financially, with improved EBITDA (earnings before interest, tax, depreciation and amortisation) and operating cashflow. Return on average shareholders’ equity was also up slightly.

This translated into EBITDA of $314.2 million, up $10.2 million on the previous year, with operating cashflow up $32.2 million to $227.9 million and net surplus after taxation up $11.6 million to $112.4 million.

Ms Durbin said the company was leading the way in developing new smart metering technology which would allow two-way electronic communication between electricity retailers and customers’ meters, revolutionising both the metering and retail businesses.

Approximately 4,000 Mercury Energy customers in Auckland’s eastern suburbs were the first to be fitted with the smart meters. A full deployment of smart meters will be rolled out to some 350,000 homes over the next few years.

These meters include modern pre-pay capability which would enable far greater flexibility for customers in managing their electricity bills and paying their accounts.  As well as making better technology available to customers, Mercury Energy had also established a dedicated Customer Assistance team, which has worked closely with a range of social agencies and community groups to introduce new ways to assist customers.