$2m kitty for power saving bid

By VERNON SMALL deputy political editor

The Government is backing its call for electricity savings with extra finance to sell the conservation message and a symbolic move to cut Parliament's demands on the national grid.

The cabinet yesterday approved $2.25 million for a power conservation campaign after Energy Minister Pete Hodgson last week called for savings of 10 per cent over 10 weeks to avert an electricity crisis.

Half of the cash would be used for an advertising campaign, starting on August 12, and the rest would be earmarked for electricity audits of large commercial and light industrial firms.

The campaign, featuring television and newspaper advertisements, billboards, brochures, videos and direct mail, would run for four weeks, with a possible extension if lake levels were still low.

Storage levels in some hydro lakes had improved slightly over the weekend after rain at Lakes Manapouri and Wanaka. But Tekapo, Ohau and Taupo were still falling.

Consumers had lowered demand by 3.9 per cent on Saturday (compared with the previous four Saturdays) and 3 per cent on Sunday, but that did not take into account the impact of warmer weather.

Prime Minister Helen Clark said the savings were a good start.

Mr Hodgson said: "That's just fine by me. I was pretty pleased with that."

But lower demand did not ease sky-high prices.

Friday's average cost of wholesale electricity was 33.27c a kilowatt hour against 33.32c on Sunday.

Mr Hodgson said the cabinet had discussed the wholesale electricity market and some ministers felt it might have "imperfections".

But the Major Electricity Users' Group wants the industry's market surveillance committee to use its power to declare "an undesirable situation" and manage the market.

"The contingency rules were drafted in case circumstances occurred which were beyond the power of the market to deal with. We have that situation right now," said the group's chairman, Terrence Currie.

"Running out of water, combined with high prices that are closing down production, is without doubt an undesirable situation."

The cabinet yesterday also approved a target of 15 per cent power savings in the core public sector, although Mr Hodgson said he did not want to see cold hospital wards or schools.

To underline his message he staged a media stunt, turning on Parliament's two diesel generators.

The move would lower Parliament's demand on the national grid by at least 20 per cent, but would cost an extra $30,000 a month and add to increased greenhouse gas emissions.

The complex last month consumed 730,000kW hours. A cut of 146,000kW hours would power 150 to 180 average households.

Parliament last night also lowered the level of corridor lighting and turned off floodlights outside Government House.

Mr Hodgson said Parliament was already an energy-efficient building, but the extra efforts would help.

Last year it won energy efficiency and conservation awards after savings of $359,000 or 22.5 per cent were made.

Mr Hodgson said Parliament's moves and increased non-hydro generation would boost greenhouse gas emissions.

Thermal generation causes about 8 per cent of the country's total greenhouse gas output.

"I wouldn't be at all surprised if 8 per cent became 10 per cent for this period of time," Mr Hodgson said.

He will hold a second meeting with industry and consumer representatives today to discuss shortages. The meeting follows Friday's summit and will discuss how retailers could offer incentives to save, including "buy-back" schemes giving rebates to consumers who cut their usage.

Meanwhile, former energy minister Max Bradford said yesterday he was unhappy about his reforms being linked to the present problems.

He was responsible for changes to the retail market, allowing companies to compete with each other for customers, not the development of the wholesale electricity market.

The consumers' ability to switch power companies had stopped the worst wholesale electricity price rises being passed on to them.

Feature: Electricity

Energy Efficiency and Conservation Authority