MRP extends option to bigger stake in US geothermal firm

Mighty River Power says it has extended an option to increase its stake in US-based geothermal company EnergySource from 20 percent to 33.3 percent.

In its first quarterly update since 49 percent of the state-controlled electricity company floated on the NZX and ASX on May 10, MRP says its original option expired last month, but had been extended to the first quarter of the 2014 financial year "while the company considers whether or not it would exercise the option".

EnergySource has already developed one geothermal power station in California, commissioned in 2012, and is in the pre-development stages with a similar project in the same area.

MRP tidied up its involvement in international geothermal investments in February, ahead of its partial privatisation, dissolving a 10-year joint venture with American and German geothermal investors at the half-way point. It retained its 20 percent share of the Californian plant, along with greenfields opportunities in Chilean geothermal resources.

Meanwhile, the company says it has now settled three sets of appeals against resource consents granted for its proposal for a 301 Megawatt, 53 turbine wind farm at Puketoi, near Dannevirke, which takes the company's consented wind capacity to 490MW, when its Turitea wind farm consents are included.

The consents run for a decade, so although MRP says it is "unlikely to build a new power station in the next three to five years", securing consents and starting geothermal exploration are important steps because of the long lead time required for building new generation.

With that in mind, MRP has also applied for resource consents to begin exploratory drilling for the proposed Te ia a Tutea geothermal project in the Taheke geothermal steamfield, near Rotorua.

Elsewhere, the company confirmed its 82MW Ngatamariki geothermal project continues in its commissioning phase, having delivered first energy to the national grid in March, with output of up to 40MW.

Two further generating units are expected to come online this month for full commissioning mid-2013 and with contributions to company earnings occurring in the 2014 financial year.

Reflecting contracts written in anticipation of new generation capacity becoming available, MRP says its total electricity sales in the quarter ended March 31 were up 5 percent, with the average price received from customers flat on the prior comparable period at $112.22 per MWh.

Drought conditions which drained Lake Taupo to well below average levels of storage earlier in the year have eased, with storage levels at 61 percent of average at the end of May, compared to 33 percent at the end of March.

The shares fell 0.8 percent to $2.38 today.


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