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Power Crisis Far From Over; Market Review Wanted

Spot prices for electricity are still double what they were this time last year; the power crisis is far from over despite Energy Minister Pete Hodgson's suggestion that it is, the Employers & Manufacturers Association says.

"The Minister is sending the wrong message on the electricity market and energy conservation," said Alasdair Thompson, EMA's chief executive.

"The power crisis is certainly not over for commercial users who are bearing the brunt of it.

"According to Treasury the current crisis has cost the economy $200 million so far. With many companies now locked into price increases up to 60 per cent more than a few months ago, the costs will go on rising.

"It could all happen again next year, particularly if we start tapping the southern lakes too soon. NIWA is predicting rainfall through to October will be below average, with the likelihood of a dry summer and another cold, dry winter next year.

"The crisis will not be over until spot prices return to normal levels and for that we need rain where it counts. The Minister's predictions of the southern lake levels returning to normal levels are premature.

"The best way to get prices down is to strive for power savings. The Minister's comments are unhelpful with this.

"Employers should also use the crisis to consider how they should manage staff commitments if they're unable to keep them fully employed at work, if electricity shortages continue, or for any other reason.

"People can't just be sent off on holiday, or made redundant without observing the proper legal procedures.

"Government must conduct a review of the electricity market to avoid the risk of recurrence of another crisis next year, or the year after.

"Without a full scale review the risk of power cuts will hang over investment and job growth."

Ends


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