1 00:00:00,080 --> 00:00:02,519 Speaker 1: More insight into our power industry as we had towards winter. 2 00:00:02,880 --> 00:00:04,960 Speaker 1: Meridian reported in that loss of one hundred and twenty 3 00:00:04,960 --> 00:00:06,920 Speaker 1: one million dollars yesterday. Is that bad? Yes, it is. 4 00:00:07,120 --> 00:00:10,360 Speaker 1: Meridian chief financial officer and incoming CEO, Mike Rhans with 5 00:00:10,440 --> 00:00:12,080 Speaker 1: us on all of this might be very good morning 6 00:00:12,119 --> 00:00:12,400 Speaker 1: to you. 7 00:00:13,400 --> 00:00:14,160 Speaker 2: Hey morning, Mike. 8 00:00:14,480 --> 00:00:16,919 Speaker 1: This line you ran yesterday, you took a hit for 9 00:00:16,960 --> 00:00:18,600 Speaker 1: New Zealand. Does that spin or reel? 10 00:00:20,280 --> 00:00:24,040 Speaker 2: Oh, it's real. You know last year last year was tough, 11 00:00:24,160 --> 00:00:29,840 Speaker 2: largely because it didn't rain, but we also had an unexpected, 12 00:00:29,920 --> 00:00:34,599 Speaker 2: unprecedented shortage of gas at the same time, so we 13 00:00:34,640 --> 00:00:37,080 Speaker 2: had to take two hundred million dollars of cover that 14 00:00:37,120 --> 00:00:39,360 Speaker 2: we didn't expect we'd need to to keep the lights on. 15 00:00:41,400 --> 00:00:43,280 Speaker 2: So you know, what we were trying to say is 16 00:00:43,320 --> 00:00:45,800 Speaker 2: we put some curious supply first, and we do it again. 17 00:00:45,840 --> 00:00:47,960 Speaker 2: I mean, it's part of the it's part of the 18 00:00:48,040 --> 00:00:50,879 Speaker 2: territory for US. Droughts, managing droughts part of the territory. 19 00:00:50,960 --> 00:00:52,919 Speaker 2: But you know, being a big business in the country 20 00:00:53,040 --> 00:00:56,800 Speaker 2: is when things get tough, our job is to help 21 00:00:56,840 --> 00:00:59,560 Speaker 2: manage those conditions. So that's what we did. 22 00:01:00,160 --> 00:01:02,520 Speaker 1: Which would you so manage the conditions. You can't. If 23 00:01:02,520 --> 00:01:03,920 Speaker 1: you haven't got any gas, you haven't got any rain, 24 00:01:03,960 --> 00:01:05,680 Speaker 1: there's nothing you can do about it. You lose money. 25 00:01:05,760 --> 00:01:07,800 Speaker 1: Is your mix all wrong and you're fixing your mix? 26 00:01:08,720 --> 00:01:11,319 Speaker 2: Well, I think that was the problem that was unexpected. 27 00:01:11,400 --> 00:01:14,160 Speaker 2: The loss of gas was, you know, something we didn't expect, 28 00:01:14,160 --> 00:01:18,120 Speaker 2: and we think that is the big challenge we you know, 29 00:01:18,120 --> 00:01:21,720 Speaker 2: we rely on gas, we rely on water, but uh, 30 00:01:22,080 --> 00:01:25,199 Speaker 2: you know, it's the loss of gas that we think 31 00:01:25,600 --> 00:01:29,480 Speaker 2: is a potential structural issue for the country, not just 32 00:01:29,560 --> 00:01:32,480 Speaker 2: the electricity sector, and we think it needs a lot 33 00:01:32,520 --> 00:01:32,919 Speaker 2: of attention. 34 00:01:33,200 --> 00:01:35,399 Speaker 1: So didn't you, I mean, I don't know what you 35 00:01:35,440 --> 00:01:37,440 Speaker 1: were doing when Jacinda was running the class, but once 36 00:01:37,440 --> 00:01:38,959 Speaker 1: you wandered around said we're not going to look for 37 00:01:38,959 --> 00:01:42,360 Speaker 1: oil gas anymore, did know? And Mercury go that Meridian 38 00:01:42,480 --> 00:01:44,800 Speaker 1: rather go that might affect us. 39 00:01:46,080 --> 00:01:49,680 Speaker 2: We've always said that, you know, electricity sector, while we 40 00:01:49,720 --> 00:01:52,200 Speaker 2: can become more reviewable over time, that we're going to 41 00:01:52,280 --> 00:01:55,400 Speaker 2: need gas is a transition feel So you know, I 42 00:01:55,440 --> 00:01:58,520 Speaker 2: think that's the challenge that we found last year, is 43 00:01:59,280 --> 00:02:03,600 Speaker 2: that transition fuel has got its own challenges, and you know, 44 00:02:03,720 --> 00:02:05,600 Speaker 2: we thought it was going to be affordable. We found 45 00:02:05,640 --> 00:02:09,679 Speaker 2: it was unaffordable. It shows through in our result. And 46 00:02:09,800 --> 00:02:12,760 Speaker 2: so now we're scrambling, you know, we're we thought we 47 00:02:12,760 --> 00:02:14,760 Speaker 2: were going to rely on it as a country. We're 48 00:02:14,800 --> 00:02:18,360 Speaker 2: scrambling to find or turn its and so we're going 49 00:02:18,400 --> 00:02:21,720 Speaker 2: back to you know, things that had been dust or 50 00:02:21,760 --> 00:02:24,320 Speaker 2: were dusting things off that been looked at ten fifteen 51 00:02:24,440 --> 00:02:26,760 Speaker 2: years ago. And you know, one of the things we 52 00:02:26,880 --> 00:02:30,440 Speaker 2: found is that there's a bunch of contingent hydro storage 53 00:02:30,440 --> 00:02:33,679 Speaker 2: that sits out there. So it's about twenty percent of 54 00:02:34,000 --> 00:02:37,680 Speaker 2: New Zealand's hydro storage that sits there for these sorts 55 00:02:37,720 --> 00:02:41,760 Speaker 2: of conditions that doesn't get touched. And we're talking to regulators, 56 00:02:42,639 --> 00:02:45,720 Speaker 2: you know, our stakeholders transpower to see whether we can't 57 00:02:45,800 --> 00:02:49,200 Speaker 2: open that up to try and bring energy prices down 58 00:02:49,240 --> 00:02:51,359 Speaker 2: and deal with the fact that, you know, we don't 59 00:02:51,440 --> 00:02:53,600 Speaker 2: have the gas supply that we thought. 60 00:02:53,280 --> 00:02:55,639 Speaker 1: Why wouldn't they, Why wouldn't they This is interesting, Why 61 00:02:55,680 --> 00:02:57,800 Speaker 1: wouldn't they do that? Why would they let it spike 62 00:02:57,919 --> 00:02:59,760 Speaker 1: last one to do eight hundred bucks and still not 63 00:02:59,840 --> 00:03:01,240 Speaker 1: let get you access to that? 64 00:03:02,240 --> 00:03:05,320 Speaker 2: Yeah, well, I mean it's I might not be the 65 00:03:05,400 --> 00:03:06,200 Speaker 2: right person to ask. 66 00:03:06,240 --> 00:03:08,640 Speaker 1: Michael, probably a bit company. 67 00:03:09,520 --> 00:03:13,679 Speaker 2: Yeah, well, we think it's a no brainer. So, you know, 68 00:03:13,760 --> 00:03:16,919 Speaker 2: we think it'll bring electricity prices down and it'll deal 69 00:03:17,000 --> 00:03:19,480 Speaker 2: with the fact that we've got some challenges in the 70 00:03:19,480 --> 00:03:21,800 Speaker 2: gas industry. So we think it's exactly what we need, 71 00:03:23,000 --> 00:03:25,040 Speaker 2: and you're wearing a conversation with them to try and 72 00:03:25,080 --> 00:03:27,600 Speaker 2: do exactly that. Let's not wait for those same conditions 73 00:03:27,600 --> 00:03:31,920 Speaker 2: to unfold. Let's open that at hydro storage up so 74 00:03:31,919 --> 00:03:32,639 Speaker 2: that we can use it. 75 00:03:33,080 --> 00:03:37,440 Speaker 1: Has has last year's disaster of the season coalesced the 76 00:03:37,720 --> 00:03:40,600 Speaker 1: industry in general around the broad idea that we need 77 00:03:40,640 --> 00:03:41,600 Speaker 1: to do better than we are. 78 00:03:44,360 --> 00:03:46,960 Speaker 2: Yeah, I mean there's a massive amount of investment that's 79 00:03:47,000 --> 00:03:49,920 Speaker 2: going on, you know, the challenge that we've got, so 80 00:03:50,360 --> 00:03:52,840 Speaker 2: you know, we're going to invest embarks by the end 81 00:03:52,840 --> 00:03:56,400 Speaker 2: of this calendar year. You've heard others talk to the 82 00:03:56,480 --> 00:03:59,760 Speaker 2: same thing, and that investment's going in. But the challenge 83 00:03:59,800 --> 00:04:03,040 Speaker 2: would got it takes any intensive industry, it takes a 84 00:04:03,080 --> 00:04:06,440 Speaker 2: couple of years for that investment to come to fruition. 85 00:04:06,520 --> 00:04:08,960 Speaker 2: You know, we're not going to have those power stations 86 00:04:09,000 --> 00:04:12,400 Speaker 2: producing energy for a couple of years, so it's what 87 00:04:12,440 --> 00:04:14,880 Speaker 2: do we do in the next couple of years? Given 88 00:04:14,960 --> 00:04:19,160 Speaker 2: we found that we're not going to reply on gas and. 89 00:04:19,240 --> 00:04:22,120 Speaker 1: We're cold and stuff like that. Can you reassure me 90 00:04:22,800 --> 00:04:26,320 Speaker 1: that that all of this investment in renewables is when 91 00:04:26,360 --> 00:04:30,200 Speaker 1: it comes online, that's it. We've done. We've sorted our 92 00:04:30,240 --> 00:04:31,880 Speaker 1: problem out and we're not going to have the same 93 00:04:31,960 --> 00:04:34,719 Speaker 1: tedious conversation leading into every winter that we don't have 94 00:04:34,839 --> 00:04:35,320 Speaker 1: enough power. 95 00:04:36,279 --> 00:04:38,839 Speaker 2: Yeah. I mean, that's the great news is I can't 96 00:04:38,880 --> 00:04:41,839 Speaker 2: show you once that comes on board, as it allows 97 00:04:41,920 --> 00:04:45,159 Speaker 2: us to use the hydro storage. You know, New Zealand's 98 00:04:45,160 --> 00:04:48,440 Speaker 2: got a bounty of hydro energy that other countries would love. 99 00:04:49,200 --> 00:04:52,480 Speaker 2: And once we've invested in those renewables we sought our 100 00:04:52,560 --> 00:04:56,080 Speaker 2: hydro storage out is it can drive competitive advantage into 101 00:04:56,160 --> 00:04:59,359 Speaker 2: this economy. That's durable good because other countries don't have 102 00:04:59,400 --> 00:05:00,400 Speaker 2: what we've got, and. 103 00:05:00,279 --> 00:05:02,360 Speaker 1: That includes data centers and stuff like that. 104 00:05:04,240 --> 00:05:09,520 Speaker 2: Yeah, if we can invest in more you know, renewable technologies, 105 00:05:09,600 --> 00:05:12,560 Speaker 2: we can invite people to come to the country and 106 00:05:13,120 --> 00:05:14,960 Speaker 2: do their business here and that that's I mean, that's 107 00:05:15,000 --> 00:05:17,800 Speaker 2: basically the plan is we've got a bounty of renewable energy, 108 00:05:18,360 --> 00:05:22,640 Speaker 2: we've got to get those investments in place, and then 109 00:05:22,640 --> 00:05:25,880 Speaker 2: we've got a power system that other people around the 110 00:05:25,920 --> 00:05:29,039 Speaker 2: globe will look at with envy because they can't replicate 111 00:05:29,160 --> 00:05:31,960 Speaker 2: what we've got. So we're hopeful of attracting, you know, 112 00:05:31,960 --> 00:05:34,960 Speaker 2: whether it's data centers or anybody, we'd love them to well. 113 00:05:34,960 --> 00:05:36,479 Speaker 1: I hope, I hope you're right. I've got a personal 114 00:05:36,520 --> 00:05:39,839 Speaker 1: obsession with nuclear and there's a lot of people going nuclear, 115 00:05:39,880 --> 00:05:41,800 Speaker 1: and you can do it a lot more efficiently and 116 00:05:41,960 --> 00:05:44,240 Speaker 1: in a smaller capacity and way than you used to 117 00:05:44,240 --> 00:05:45,920 Speaker 1: be able to do You ever see the day that 118 00:05:45,920 --> 00:05:47,840 Speaker 1: that could even be a conversation in this country of 119 00:05:47,920 --> 00:05:49,360 Speaker 1: where just that that ship sailed. 120 00:05:50,520 --> 00:05:52,640 Speaker 2: I think it's a tough one, Mike, I do. I 121 00:05:52,680 --> 00:05:56,719 Speaker 2: think it takes so long introduce the regulatory settings and 122 00:05:56,720 --> 00:06:00,400 Speaker 2: then invest in so I think, you know, we're better 123 00:06:00,839 --> 00:06:03,640 Speaker 2: relying on the resources that we've got, and you know 124 00:06:03,720 --> 00:06:06,840 Speaker 2: where we need to open up this conversation on hydro storage. 125 00:06:06,880 --> 00:06:09,480 Speaker 2: It's the thing we've got as a country that other 126 00:06:09,520 --> 00:06:11,400 Speaker 2: people don't like. We have it in space. You know, 127 00:06:11,400 --> 00:06:12,799 Speaker 2: we've got a lot of water that flows. 128 00:06:13,000 --> 00:06:15,960 Speaker 1: I think most people I followed this industry, I would 129 00:06:16,040 --> 00:06:18,159 Speaker 1: argue reasonably closely. I didn't know that. I didn't know 130 00:06:18,160 --> 00:06:20,840 Speaker 1: that transpower will holding you back. And there's a scandal 131 00:06:20,920 --> 00:06:23,000 Speaker 1: in that, and I don't understand why there's a scandal, 132 00:06:23,000 --> 00:06:25,080 Speaker 1: And I don't understand why there's a Minister of energy 133 00:06:25,080 --> 00:06:27,160 Speaker 1: that would be overseeing the scandal at a point of 134 00:06:27,200 --> 00:06:30,040 Speaker 1: eight hundred dollars for a spot price and all the 135 00:06:30,080 --> 00:06:32,159 Speaker 1: nonsense we went through last winter and not have done 136 00:06:32,160 --> 00:06:34,000 Speaker 1: something about that. If you've got the water and all 137 00:06:34,120 --> 00:06:36,320 Speaker 1: you can need is access, why don't we have I mean, 138 00:06:36,320 --> 00:06:37,040 Speaker 1: how hard can it be? 139 00:06:38,000 --> 00:06:41,719 Speaker 2: Yeare we think everyone's supported, Mike. It's just working through, 140 00:06:42,080 --> 00:06:44,480 Speaker 2: you know, it's working through the issues to get it unlocked. 141 00:06:44,640 --> 00:06:47,159 Speaker 2: So yeah, well good luck with it. 142 00:06:47,240 --> 00:06:49,520 Speaker 1: But yeah, good luck with it. Well we'll follow up. 143 00:06:49,520 --> 00:06:51,480 Speaker 1: Who's the Minister of energy? Off the top of my head, 144 00:06:53,400 --> 00:06:57,240 Speaker 1: give it to me now, actually ring them up? Did 145 00:06:57,320 --> 00:06:59,320 Speaker 1: you know about that? I didn't know about that. I'm 146 00:06:59,320 --> 00:07:01,960 Speaker 1: disappointed myself that I didn't know about that. But if 147 00:07:02,000 --> 00:07:04,520 Speaker 1: we've got all that, and they'll say arts for reserves 148 00:07:04,560 --> 00:07:06,719 Speaker 1: for a really difficult day, they couldn't say it's for 149 00:07:06,720 --> 00:07:09,120 Speaker 1: a rainy day, because that's exactly the sort of day 150 00:07:09,160 --> 00:07:14,400 Speaker 1: they'd want. Come on, what, Simon, Wat's Simon, I've got 151 00:07:14,440 --> 00:07:18,000 Speaker 1: more water? Than I need. What's what's great name from 152 00:07:18,080 --> 00:07:21,760 Speaker 1: a Minister of energy? What's he doing? We're gonna get 153 00:07:21,800 --> 00:07:22,640 Speaker 1: him on the program. 154 00:07:23,000 --> 00:07:25,880 Speaker 2: For more from the Mic Asking Breakfast, listen live to 155 00:07:26,000 --> 00:07:29,080 Speaker 2: news talks it'd be from six am weekdays, or follow 156 00:07:29,120 --> 00:07:30,680 Speaker 2: the podcast on iHeartRadio.