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New Meridian's close-to-home strategy is unveiled

By Chris Hutching

Friday 7th April 2000

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The largest ECNZ spin-off company, Meridian Energy, is focusing on winning more retail customers in the South Island, its logical catchment area.

The company began with 30,000 customers in the Bay of Plenty.

But a marketing blitz offering free Sky television connections has helped it expand to 100,000 retail customers, mostly in Northland, Hawke's Bay and the Waitaki region.

At the opening of Meridian's new administration and call centre in Christchurch this week it revealed its strategy is to secure more customers in the South Island.

State-owned enterprise Meridian was formed from the split of ECNZ, inheriting eight hydro stations on the Waitaki River, the Lake Manapouri system and a wind turbine in Wellington.

Large customers include the Comalco aluminium smelter in Southland.

But most of its retail customers are at the other end of the country, which poses some transmission inefficiencies.

Meridian's chief executive Keith Turner built his own 130-strong team when he took up the job last year.

Some analysts have queried the expense of such manoeuvres in the energy sector given that the new Labour-led government intends keeping state assets rather than privatising them - the rationale behind last year's reforms under National's Max Bradford.

Mr Turner said he doubted it would be in anyone's interest to undo the reforms and re-create ECNZ.

The proof of the reforms at the generation level had been demonstrated by the drop in the price of wholesale electricity.

There were unresolved problems for retail customers wanting to switch suppliers and Meridian wanted to speed up the process, which relied on co-operation from rivals.

An agreement was needed between the parties.

In spite of considerable talk about competition in the retail sector there is little competition on actual retail price with most points of difference between companies based on special one-off offers and different tariff levels based on supply times.

Meanwhile, Meridian reported a profit of $50.7 million for the six months to the end of December 31, 1999.

During the period Meridian paid distribution of $99.9 million to the Crown .

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