August 27, 2025 • 6 mins
The recent energy crisis has rippled out to the big companies, with Meridian the latest to take a significant financial hit.
Meridian Energy recently confirmed a $452-million-dollar loss, after being hit by periods of low wind, two major droughts, and a shortage of gas.
CEO Mike Roan says the company's been through a tough year, but they managed to shield customers from the high prices.
"We took a hit, no question about that - but we kept the lights on, so electricity flowed to people."
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Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio. Now.
Speaker 2 (00:17):
Meridian Energy has suffered from a drought, and then suffered
from a wind, and is now suffering from no profit.
The company reported a brutal full year result, posting a
net loss of four hundred and fifty million dollars. Remember,
last year was a net profit of four hundred and
thirty million dollars, so lack of when low energy yields
from hydro all been blamed. But shareholders will still get
a dividend of almost twenty one cents a share full
(00:38):
year dividend. Mike Rohan is Meridian CEO.
Speaker 3 (00:41):
And with us Hi Mike, Hey, Heather, how are you doing?
Speaker 2 (00:44):
Yeah, I'm very well. That looks like a pretty stressful year,
was it?
Speaker 3 (00:47):
Oh? It was tough. You know, the events like we
just saw play out don't come around that often. Fortunately,
feels a bit like we wear that a perfect storm.
But I know, if I walk away from the year
with anything, you go wekoga hat, no question about that.
(01:08):
But we kept the lights on so altrusy flowed to
people and we managed to shield our customers from the
high prices that played out in wholesale market. So you know,
we took the brunt of the financial issues. And you know,
reality is droughts are inevitable in the country, so every
now and then we're going to face a tough year.
Speaker 2 (01:28):
How much higher than normal was the three hundred million
dollars that you spent on price hedges.
Speaker 3 (01:35):
A lot magnitude of at least ten. Is what we
tend to do is will buy hedges as insurance products,
so you pay the insurance premium typically and that might
be in the order of twenty to thirty million. It's
when you exercise them. So when you go through a
(01:55):
drought like we did, that you exercise them and that's
where you bear really high costs. And of course this
last year, a couple of the insurance products that we
took out were suspended so they didn't work, so we
had to buy and assurance at the time we were
going through the drought, which is that costs a lot
of money. Yeah, And you know, the it was, as
(02:17):
I say, it's kind of one of those years where
we had well two droughts and we lost the gas
sector as a fuel for the ultricy sector. So you know,
thankfully that sort of stuff doesn't happen that often.
Speaker 2 (02:32):
Right now, on the gas thing, what do we do
about this? How do we fix the situation? If at all?
Speaker 3 (02:39):
It's tough. I don't know if I have an answer.
The what we are trying to do is we're trying
to as an electricy sector, move away from gas as
quickly as we can. So, you know, the Strategic Energy Reserved,
the agreement that we wrote with Genesis to improve the
(03:01):
capacity at the Humpty power station basically was that was
the altricy sector stepping away from gas. You know, a
transition fuel hopefully free some gas for you know, direct
gas customers, but ultimately, unless the gas set to can
find some more gas, which looks increasingly unlikely, you know,
(03:23):
they're going to have to step away from gas as well.
Speaker 2 (03:25):
Okay, so Mike, so you guys have faced the reality
of a declining gas situation. Do the rest of us
need to do that as well? I mean, if you
if you were a business using gas, do you need
to switch to something else like biomass or electricity. If
you're a homeowner who is still using gas, do you
need to do the same thing?
Speaker 3 (03:42):
I think as a business, you should be looking at it.
As you know, it's not a choice for everyone. So
not everybody can step to biomass or electricity, as you
say either, but for those that can, they should be
looking at the economics and the speed at which they
can move away from.
Speaker 2 (03:58):
You, I mean, don't don't sit around waiting for more gas.
A no, what about residential customers?
Speaker 3 (04:07):
So I think residential customer's got a little longer. Of course,
this all comes back to economics. And you know, while
we've seen electricity prices rise, they are largely driven by
the transmission distribution price increases. Gas prices have lifted far
quicker and faster, recognizing gas is fast gear so than
we imagined. So I think residentials, residential customers will start
(04:32):
to see the economic impact of staying with gas, and
that'll motivate people to move all their applies.
Speaker 2 (04:38):
When do we start noticing it?
Speaker 3 (04:41):
I would say this winter. If my gas bill is
anything to go by, is it's a lot higher this
year than it was last year.
Speaker 2 (04:49):
So okay, now, does the government just need to come
out and say this, I mean they're dicking around with
all this, you know, like giving us the impression. Certainly
Shane Jones, is that there may be some sort of
a gas solution. Do they simply need to come out
and say, guys, parties over switch to something else.
Speaker 3 (05:07):
You know, it's possible. All they know more than I do.
You know, we renewable energy business, so we don't. You know,
we don't see directly into the gas sectors as they might.
But you know, from everything that we can see from
the outside, it doesn't look promising that gas has a
(05:27):
major role to play for the country. So I hope
I'm wrong. I don't think you are, but hope, well
hope you know, as they say, hope, it's not a strategy.
And the you know, you've got to look at the
cost that you're facing them whether you can actually get
access to you know, gas, and we've decided as a sector,
(05:48):
but that's increasingly unlikely for electricity users and it's impacting
the cost of electricity, and so we've got to move
to other fuels, and ultimately we've got to invest in
more renewable assets to move off gas entirely, reduce the
amount of coal we're using the system, and actually drop
the cost of electricity for people more generally and drive
(06:10):
competitive advantage into the economy. So we've had a you know,
we've had a wake up as well, but we're moving
at pace.
Speaker 2 (06:19):
Yeah, Mike, listen, it's good to talk to you. I
really appreciate it. Micro own Meridian Energy CEO.
Speaker 1 (06:25):
For more from News Talk st B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio.
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio. Now.
Speaker 2 (00:17):
Meridian Energy has suffered from a drought, and then suffered
from a wind, and is now suffering from no profit.
The company reported a brutal full year result, posting a
net loss of four hundred and fifty million dollars. Remember,
last year was a net profit of four hundred and
thirty million dollars, so lack of when low energy yields
from hydro all been blamed. But shareholders will still get
a dividend of almost twenty one cents a share full
(00:38):
year dividend. Mike Rohan is Meridian CEO.
Speaker 3 (00:41):
And with us Hi Mike, Hey, Heather, how are you doing?
Speaker 2 (00:44):
Yeah, I'm very well. That looks like a pretty stressful year,
was it?
Speaker 3 (00:47):
Oh? It was tough. You know, the events like we
just saw play out don't come around that often. Fortunately,
feels a bit like we wear that a perfect storm.
But I know, if I walk away from the year
with anything, you go wekoga hat, no question about that.
(01:08):
But we kept the lights on so altrusy flowed to
people and we managed to shield our customers from the
high prices that played out in wholesale market. So you know,
we took the brunt of the financial issues. And you know,
reality is droughts are inevitable in the country, so every
now and then we're going to face a tough year.
Speaker 2 (01:28):
How much higher than normal was the three hundred million
dollars that you spent on price hedges.
Speaker 3 (01:35):
A lot magnitude of at least ten. Is what we
tend to do is will buy hedges as insurance products,
so you pay the insurance premium typically and that might
be in the order of twenty to thirty million. It's
when you exercise them. So when you go through a
(01:55):
drought like we did, that you exercise them and that's
where you bear really high costs. And of course this
last year, a couple of the insurance products that we
took out were suspended so they didn't work, so we
had to buy and assurance at the time we were
going through the drought, which is that costs a lot
of money. Yeah, And you know, the it was, as
(02:17):
I say, it's kind of one of those years where
we had well two droughts and we lost the gas
sector as a fuel for the ultricy sector. So you know,
thankfully that sort of stuff doesn't happen that often.
Speaker 2 (02:32):
Right now, on the gas thing, what do we do
about this? How do we fix the situation? If at all?
Speaker 3 (02:39):
It's tough. I don't know if I have an answer.
The what we are trying to do is we're trying
to as an electricy sector, move away from gas as
quickly as we can. So, you know, the Strategic Energy Reserved,
the agreement that we wrote with Genesis to improve the
(03:01):
capacity at the Humpty power station basically was that was
the altricy sector stepping away from gas. You know, a
transition fuel hopefully free some gas for you know, direct
gas customers, but ultimately, unless the gas set to can
find some more gas, which looks increasingly unlikely, you know,
(03:23):
they're going to have to step away from gas as well.
Speaker 2 (03:25):
Okay, so Mike, so you guys have faced the reality
of a declining gas situation. Do the rest of us
need to do that as well? I mean, if you
if you were a business using gas, do you need
to switch to something else like biomass or electricity. If
you're a homeowner who is still using gas, do you
need to do the same thing?
Speaker 3 (03:42):
I think as a business, you should be looking at it.
As you know, it's not a choice for everyone. So
not everybody can step to biomass or electricity, as you
say either, but for those that can, they should be
looking at the economics and the speed at which they
can move away from.
Speaker 2 (03:58):
You, I mean, don't don't sit around waiting for more gas.
A no, what about residential customers?
Speaker 3 (04:07):
So I think residential customer's got a little longer. Of course,
this all comes back to economics. And you know, while
we've seen electricity prices rise, they are largely driven by
the transmission distribution price increases. Gas prices have lifted far
quicker and faster, recognizing gas is fast gear so than
we imagined. So I think residentials, residential customers will start
(04:32):
to see the economic impact of staying with gas, and
that'll motivate people to move all their applies.
Speaker 2 (04:38):
When do we start noticing it?
Speaker 3 (04:41):
I would say this winter. If my gas bill is
anything to go by, is it's a lot higher this
year than it was last year.
Speaker 2 (04:49):
So okay, now, does the government just need to come
out and say this, I mean they're dicking around with
all this, you know, like giving us the impression. Certainly
Shane Jones, is that there may be some sort of
a gas solution. Do they simply need to come out
and say, guys, parties over switch to something else.
Speaker 3 (05:07):
You know, it's possible. All they know more than I do.
You know, we renewable energy business, so we don't. You know,
we don't see directly into the gas sectors as they might.
But you know, from everything that we can see from
the outside, it doesn't look promising that gas has a
(05:27):
major role to play for the country. So I hope
I'm wrong. I don't think you are, but hope, well
hope you know, as they say, hope, it's not a strategy.
And the you know, you've got to look at the
cost that you're facing them whether you can actually get
access to you know, gas, and we've decided as a sector,
(05:48):
but that's increasingly unlikely for electricity users and it's impacting
the cost of electricity, and so we've got to move
to other fuels, and ultimately we've got to invest in
more renewable assets to move off gas entirely, reduce the
amount of coal we're using the system, and actually drop
the cost of electricity for people more generally and drive
(06:10):
competitive advantage into the economy. So we've had a you know,
we've had a wake up as well, but we're moving
at pace.
Speaker 2 (06:19):
Yeah, Mike, listen, it's good to talk to you. I
really appreciate it. Micro own Meridian Energy CEO.
Speaker 1 (06:25):
For more from News Talk st B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio.
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