Key Points:

Big businesses are considering reducing their electricity consumption over winter amid warnings predicted shortages could lead to power cuts for residential users.

Lines companies and power suppliers are meeting today to discuss whether emergency measures should be put in place to deal with the peak power periods this winter.

The Major Electricity Users Group represents large industrial users of electricity and their executive director Ralph Mathes said if households could have their hot water turned off during peak periods then industrial users could also lessen demand.

"Providing they get compensation, it's up to the market to find out," Mr Mathes said.

The Herald has reported that southern hydro lakes - which generate about 70 per cent of the country's power - are already lower than the 80-year average and could be drained in six weeks in winter if there is no significant rainfall.

Both Niwa and the MetService are forecasting lower than average rainfall through late summer in the southern hydro catchments and if lake levels remain low by April, winter prospects could be grim.

The National Winter Group, who meet today, have warned there could be power cuts this winter, mainly for residential consumers, due to generator or transmission equipment failure.

They are likely to finalise contingency planning including better generation and demand forecasting.

Power supplies are already tight because two of Contact's New Plymouth power stations are out of action - one permanently - and the capacity of the interisland link has been drastically cut after insurers concerns about fire risk forced the closure of Pole One last September.

The hot, dry weather in the Waikato has also forced the Huntly power station to reduce generation to avoid discharging water used to cool the power plant into the Waikato River when it is higher than 23 degrees.

- NZHERALD STAFF