Powerful shift in energy demand
Changing household power consumption habits are forcing power companies to do things differently.
Despite a 186 per cent rise in profit to $168.9 million in the year to the end of June, Vector says the growth in Auckland’s population is not expected to translate into growth in regulated earnings for the next two to three years.
Chairman Michael Stiassny said Vector had to continue to look to other sources to generate revenue to plug this gap.
‘‘Vector is a business under pressure through a combination of consumer trends, a low interest rate environment and regulatory settings,’’ he said.
‘‘The downward movements in our regulated networks’ financial results may be small, but they are noticeable: electricity connections may be up, but throughput is down; gas volumes are up, but prices are about to be reset down.’’
He said the firm’s earnings were still down $30m from where they were four years ago, despite its investment of $700m in its regulated networks.
‘‘Don’t make the mistake of dismissing these as one-off anomalies; they are trends. Vector’s performance is – and will continue to be – impacted by changing energy consumption patterns.
‘‘There is no room for complacency – the future is here.’’
Chief executive Simon Mackenzie said the rate of change in consumer habits was increasing.
Even the use of LED lightbulbs had a big impact on the way energy was consumed, he said.
Electric vehicles would also have an impact, although there would need to be steps taken to ensure that, if they were adopted by more drivers, they did not all try to recharge them at the same time and put pressure on the grid.
Meridian, which reported a $197m profit, said it was focused on retaining customers.
‘‘Meridian retail is one of the leading retailers with a ‘move-in’ churn rate for the year to June 30 of 12 per cent. This rate is below the industry rate of 13.3 per cent and reflects the success of our marketing campaigns and the improvements we’ve made in supporting customers when they move homes,’’ said its chief executive, Mark Binns.
But he said it too was helping customers to adopt new tech- nology through special pricing plans.
‘‘Meridian has a market-leading pricing plan for customers who own electric vehicles, which enables them to charge their cars overnight on tariffs lower than they would otherwise pay.’’