Page "Meridian Energy" Paragraph 4

* September 2001-Meridian purchased the South Island customer-base of Natural Gas Corporation ( NGC ), at the time New Zealand's largest electricity retailer.

The purchase came towards the end of an exceptionally dry autumn.

Low hydro-levels had driven the wholesale market spot prices to very high levels.

NGC had purchased the customer-base when Canada's TransAlta quit New Zealand.

NGC re-branded itself as OnEnergy to escape the poor reputation of the " TransAlta " brand.

OnEnergy found itself with insufficient generation capacity to stand the high winter market prices, and had made the critical mistake of not purchasing any hedge contracts.

It attempted to raise its retail prices, but its customers then flocked to other retailers.

Finally, after suffering huge losses, NGC had perforce to quit the retail sector, selling its customer-base to two of the Government's companies: Meridian and Genesis Energy.

At that point the New Zealand electricity market became further vertically integrated, and many have come to believe that this adversely affected competition in the retail electricity market.