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Impact of the electricity market crisis

Impact of the electricity market crisis – to 4 April 2003 lost manufacturing sales total $9.1 million

”Manufacturers’ have lost sales of $9.1 million between 1 March to 4 April 2003 as a result of having to respond to the extraordinary high prices in the wholesale market,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG). Forced demand reductions between 1 March and 4 April were approximately 39,000 MWh. This is the 3rd week that survey results have been released by MEUG.

“For the week ending Friday 4th April 2003 spot prices averaged 15.7 c/kWh at Haywards. In comparison the energy cost of an average households power bill is about 7 c/kWh (and just over 13 c/kWh including line charges).

“This week we are also releasing the results of a survey to determine the additional cost by businesses that have been forced to purchase electricity on the spot market, for example because they are processing foodstuffs or other essential commodities for the economy. The additional cost over and above 7 c/kWh (ie the average household cost) to those surveyed is estimated to be $7.9 million. A growing number of smaller enterprises are likely to see significant increases in their monthly power bills as March spot prices flow through.

“The graphs on the next page summarise the lost sales and additional spot purchase costs from those surveyed by MEUG and the Haywards spot price relative to that paid by households since 1 March.

“As at late this afternoon the near term outlook looks very grim with indicative spot prices from 1:30pm rising to between 40 and 50 c/kWh at Haywards (final prices will be known tomorrow).

“The electricity savings campaign to be launched this week by the Grid Security Committee (GSC) formed Winter Power Task Force cannot start soon enough.

“In the meantime we are waiting for a response to our proposal on 19 March that a select Committee inquire whether the three SOE generators have been making excess profits and Official Information Act requests of 27 March to clarify options considered to date and to ensure a robust, transparent and inclusive policy review from hereon,” concluded Mr Matthes.

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