31 Aug 2010

Genesis to drive for more South Island customers

7:03 am on 31 August 2010

Genesis will try to boost dwindling customer numbers with South Island households this year, before taking over Meridian's hydro stations at Tekapo.

The state-owned power company lost 32,000 customers, mainly from the North Island, during the year to the end of June.

That was partly responsible for a 3% drop in revenue, although the company still managed to lift its underlying earnings by more than 7% to $88 million.

Genesis is set to buy the Tekapo A and B stations from Meridian Energy, as part of a Government-driven asset swap.

Chief executive Albert Brantley says Genesis always planned to shed some customers in anticipation of getting the South Island assets, but intense competition has also driven some away.

"We knew we were going to have to lose some customers, so we've tried to concentrate on high-value customers in areas we really want to stay in," he said.

Mr Brantley said 6000 had been picked up by the end of June and the company was looking to have another 20,000 in the South Island by the end of this year.

"It looks like a good growth area," he said.

Mr Brantley said the Tekapo purchase is in the final stage of negotiations and would not say whether a price has been agreed.

But the company has arranged for $575 million in bank facilities to buy the Tekapo stations and refinance bank facilities that mature this year.

In the meantime, Mr Brantley says the company is focussed on boosting South Island customers.

Genesis has put off a decision on paying a dividend to the Government, until it has worked out the financial implications of buying the Tekapo power stations.