Contact ready with generation options

The company's CEO, Steve Barrett, says the winter just past has highlighted the fact that future generation constraints are emerging more quickly than anticipated:

"New power stations will be required within the next three to four years, with investment decisions on new capacity necessary within the next year or so.

"New investment will require higher prices than prevail at present to justify investment. It is worth noting, however, that New Zealanders now pay, and for the foreseeable future will continue to pay, among the lowest electricity prices in the developed world."

Mr Barrett says Contact has already considered future generation options and will put them into development when the time is right and it can achieve an adequate return on investment.

Contact revealed early Friday that it had made a profit for the year ended September of $130.7 million, a 35% improvement on last year's result.

The company benefited from the cold, dry weather which saw huge increases in wholesale power prices. Mr Barrett says around 40% of Contact's generation capacity benefited from the relatively higher prices which saw total revenue jump to $1.097 billion from $868 million last year.

Contact released its end of year results around a month early to help shareholders decide whether to accept a $3.85 takeover offer by the company's majority shareholder, Edison Mission Energy.

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