New Zealand government calls for power savings to avoid blackouts Deutsche Presse-Agentur (dpa) ( July 27, 2001 )

Wellington (dpa) - New Zealand Energy Minister Pete Hodgson on Friday called for a 10 per cent cut in electricity use throughout the country to avoid looming power blackouts.

He said he would ask the Cabinet on Monday to authorise a reduction of 15 per cent in power usage throughout the state sector to head off a major crisis.

Speaking to Radio New Zealand after an emergency meeting on the power situation, Hodgson appealed to householders and businesses to cut their electricity use by 10 per cent to avoid a "moderate" risk of power blackouts in September and October.

He said the country's hydro-electric lakes were at below average levels because of an unusually dry winter and there was no sign of a change in the weather pattern in the near future.

Hydro storage levels were "now a cause for considerable concern" with two South Island lakes, which together account for 60 per cent of the total national storage, were only 37 per cent and 42 per cent full, Hodgson said.

Businesses have complained about soaring prices for electricity on the spot wholesale market and warned the government of a looming threat to the economy.

After talks with a range of electricity industry representatives and business and consumer groups at an emergency meeting on the situation at Parliament on Friday, he said: "The government's primary concern is to ensure a secure supply of electricity.

"While high wholesale electricity prices are a concern, they are essentially a symptom of the underlying supply problem. Wholesale prices will come down when the supply situation improves."

dpa

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-- Martin Thompson (mthom1927@aol.com), July 27, 2001

Answers

Power fuses beginning to blow

The effects of rocketing power prices are beginning to be felt across New Zealand.

As consumers are being warned of looming power shortages, major factories are being forced to cut back on production.

The escalating wholesale electricity prices are cutting deep at industries such as Carter Holt Harvey's Kinleith pulp mill where power is a driving force in their business.

Spokesman Devon McLean said CHH is looking at increases of five hundred to seven hundred percent on last year's position.

"I think it has the potential to turn into a crisis quite rapidly," McLean said.

Carter Holt Harvey is one of New Zealand's biggest power users.

If wholesale prices remain as high as they are now it concedes it may have to make drastic cutbacks at smaller plants.

Fletcher Steel is already running at reduced capacity during peak times.

Its massive Auckland plant churns through power, recycling scrap metal to produce 200,000 tonnes of steel a year.

Spokesman Andrew Reding says their power prices are normally at $40- $50 a megawatt hour but on Wednesday the price was $300 a megawatt hour.

Fletcher's is not panicking yet but admits it is worried about the months to come.

And Comalco Aluminium has reduced its production by five percent.

Business leaders fear there are more serious problems looming.

Terrence Currie from the Major Electricity Users Group says it is going to be more difficult for companies to be able to convince their export customers that New Zealand is a safe source of supply.

And the Canterbury Chamber of Commerce says the region is potentially facing blackouts if there is not a significant change of climate within four weeks - particularly the South Island lake hydro catchments.

Urgency debate in parliament

Debate on the government's electricity legislation has been taking place under urgency in parliament.

National and Act contend it is unnecessary and ineffective.

The Electricity Industry Bill establishes an industry Governance Board to self-regulate for an efficient, reliable and environmentally sustainable electricity supply to all consumers. It also gives the government back-stop powers to step in if the industry fails to regulate itself.

National argues that state owned power generators and retailers like Meridian and Genesis are responsible for recent power price hikes and the government should share its profits without the need for legislation.

Act says the electricity industry is still maturing and consumers have begun to get more muscle, but the legislation ruins that by giving the ultimate power to the Minister.

Meanwhile power sector representatives and consumers meet the Minister on Friday to discuss looming supply problems.

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-- Martin Thompson (mthom1927@aol.com), July 27, 2001.