Meridian Energy’s June Report: 104% Hydro Storage, 7.9% Retail Sales Growth

Hydro Storage and Weather Conditions

Meridian Energy’s latest monthly operating report for June 2025 highlights a robust hydrological position, with national hydro storage climbing from 94% to 104% of the historical average by mid-July. This improvement was driven largely by the North Island’s storage reaching 150% of average, while the South Island’s storage rose to 95%. The Waiau catchment, a key water source for Meridian, recorded inflows at 113% of historical averages, and its water storage stood at a healthy 130% of average by the end of June.

Weather patterns contributed to these favorable conditions, with June being a mild month featuring above-average temperatures across most regions, except the Mackenzie Basin. Rainfall was generally above average, supporting inflows, although some areas like the North Island’s east coast and parts of the South Island’s West Coast experienced below-average precipitation.

Electricity Demand and Generation Dynamics

National electricity demand edged up by 1.4% compared to June 2024, reflecting steady consumption growth. Meridian’s generation output increased by 6.1% year-on-year in June, boosted by higher hydro and wind generation. However, the average price Meridian received for its generation plummeted by 54.2%, indicating a challenging market pricing environment. Conversely, the average price paid to supply customers also dropped by nearly 50%, suggesting some relief for consumers.

For the full financial year to date, generation volumes are down 6%, with hydro generation declining but wind generation rising. Prices for generation and supply have increased year-on-year over the longer term, reflecting market volatility and hedging strategies.

Retail Sales and Customer Growth

Meridian’s retail business showed strong momentum, with sales volumes in June 2025 rising 7.9% compared to the prior year. Gains were broad-based across customer segments, including a 12.7% increase in residential sales and a 15.2% jump in large business sales. Customer connections grew by 1.5% during June and are now 9.6% higher than a year ago, underscoring Meridian’s expanding market footprint.

Despite these gains, retail sales volumes for the financial year are slightly lower than last year, reflecting mixed segment performance and broader market factors.

Contractual and Market Developments

Meridian announced an agreement with the New Zealand Aluminium Smelter (NZAS) to conclude the current demand response arrangement by 11 August 2025. This follows calls on volume reductions during the quarter under an agreed 50MW demand response. NZAS’s average load in June was 530MW, with sales volumes lower than the previous year.

Electricity futures prices declined during the quarter, particularly for winter periods, reflecting market expectations of milder conditions and ample supply. Operating costs remained stable, down marginally by 0.2% year-on-year, while capital expenditure fell significantly by 16.5%, indicating disciplined investment management.

Outlook

NIWA’s winter 2025 outlook forecasts above-average temperatures and normal to above-normal rainfall, which could sustain strong hydro inflows and storage levels. Meridian’s operational metrics suggest resilience amid fluctuating market prices and evolving demand patterns, positioning the company well for the coming months.