Meridian Energy has swung from a $452 million loss to a $130 million net profit, and has promised that the energy part of household power bills will rise by less than inflation over the coming year. The catch is that the energy part is not what has been pushing bills up.
The company reported its result for the year to 30 June 2026 on Wednesday morning. Operating earnings, the measure the electricity sector prefers, came in at $1,051 million, up from $611 million. Operating cash flows almost tripled to $810 million. Underlying net profit, which strips out fair value movements on hedges, rose from $56 million to $308 million.
Almost all of the improvement came from water and wind rather than anything clever. Meridian’s energy margin jumped from $982 million to $1,471 million. The previous financial year had been hit by two severe droughts and a $300 million spend on hedge and demand response contracts to keep the lights on through the winter of 2024. This year the lakes filled.
Chief executive Mike Roan tied the result to the building programme. “This is a result that strengthens our financial resilience as we continue to build at pace. Delivering clean, affordable energy and advancing New Zealand’s energy independence are becoming more critical,” he said.
On prices, Roan said the company had “committed to ensuring that, for residential and small business customers, the average price increase in the energy component of the bill across all our plans will be held below the rate of inflation over the next year”. He immediately added the qualifier that matters. “Customers, though, are still facing at least three more years of regulated increases in lines and transmission charges.”
Two things are worth holding on to there. The first is what inflation actually is. Annual inflation was 4.1 per cent in the year to the June 2026 quarter, well above the Reserve Bank’s 1 to 3 per cent target band. A promise to stay below that leaves a lot of room. The second is that the energy component is only one slice of a power bill, and on the regulator’s own numbers it is not the slice doing the damage.
The Electricity Authority published its retail price monitoring for the first half of the year on 12 August. Prices across households and small businesses rose 6.8 per cent on average between 1 November 2025 and 30 June 2026, following an 8 per cent rise in 2025. That average hides a lot. About 22 per cent of households saw no change at all, which means the households that did get an increase copped an average of 8.7 per cent. Higher lines charges made up 54 per cent of the increase, a consequence of Commerce Commission decisions in 2024 that lifted the revenue Transpower and the local networks are allowed to recover while they rebuild the grid.
Stats NZ tells the same story from the household end. Electricity was up 12.0 per cent over the year to June and accounted for 8.4 per cent of the 4.1 per cent annual inflation rate, behind only petrol and diesel among the big movers. Prices and deflators spokesperson Nicola Growden noted that “higher petrol prices accounted for almost a quarter of the 4.1 percent annual increase”. Power was the next line down the list.
Meridian is the third of the four big generator retailers to report a strong year. Contact Energy posted a net profit of $423 million on operating earnings of $1,011 million on 10 August, its first full year with Manawa Energy folded in. Mercury followed on 18 August with a net profit of $321 million and operating earnings of $1,068 million, a 36 per cent lift. Add Meridian and the three have booked more than $3.1 billion of operating earnings and $874 million of net profit between them for a single financial year. Genesis Energy, the fourth of the group, had set Thursday 27 August for its own full year result.
A fair chunk of that money goes straight back to the Crown. Meridian’s board declared a final ordinary dividend of 16.10 cents per share, taking the year’s total to 22.50 cents, a 7.1 per cent increase. The Government holds 51 per cent of Meridian, Mercury and Genesis under the mixed ownership model set up in 2013, so roughly half of every dividend those three pay lands in the Government’s books. That is one of the awkward features of the argument about power company profits. The largest single shareholder collecting them is also the party being asked to do something about prices.
Meridian’s answer, and the industry’s, is that the way out is more generation. The company has two projects under construction, the 130MW Ruakākā Solar Farm and the 200MW first stage of Te Rahui Solar Farm, a joint venture with Nova. It secured consents during the year for the 90MW Mt Munro Wind Farm and the 120MW Bunnythorpe Solar Farm, and had its proposed Waiinu Energy Park admitted to the fast track process. It also won resource consent to keep operating the Waitaki Power Scheme for another 35 years, and access to an extra five metres of contingent storage in Lake Pūkaki for three years to help manage supply while the new plant is built.
Roan said wholesale forward prices had eased during 2026, which was already allowing Meridian to cut prices for commercial and industrial customers as their contracts came up for renewal. Households do not renew contracts the same way, which is part of why the wholesale market and the retail bill can move in opposite directions for months at a time. You can track what the grid is actually generating on our electricity dashboard.
Alongside the result the board approved another $7 million for Meridian’s Energy Wellbeing Programme, extending it to 2030, and a $1 million top up to its Community Decarbonisation Fund. The wellbeing programme has supported more than 4,000 households since it started in 2023 and the company now wants to reach 10,000 by 2030. The decarbonisation fund put $1.8 million into 37 not for profit organisations this year to help them shift to electric vehicles, solar panels and batteries.
The measure of the pledge will be the Electricity Authority’s next monitoring report rather than anything said this week. Meridian has committed to the average energy component across all its plans, not to any individual bill, and lines charges sit outside the promise entirely. A household could take Meridian at its word, see the energy line move by less than 4.1 per cent, and still open an annual bill that is meaningfully bigger than last year’s. That is the gap the industry now has to close if it wants the argument about profits to go away.
Has your power bill gone up this year, and did your retailer explain why? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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