KEY POINTS:
The Government is being accused of ignoring a looming power crisis as hydro lakes fall towards half their normal levels and electricity spot prices soar.
The fear of a winter crisis yesterday spurred Contact Energy to reopen part of a power station mothballed only last year because of
asbestos danger.
Workers in breathing gear and protective suits will run a 100MW gas-fired machine in the 32-year-old New Plymouth station around the clock to help boost supply during winter.
The moves comes as:
* Hydro lakes drop to 57 per cent of average storage, their lowest level since the power crisis of 1992.
* Some big industrial users cut production because of crippling wholesale spot prices.
* Another big power company, Meridian, warns that these prices will spill into household bills when tariffs are reset throughout the year.
Information from Winter Power Watch
Power saving tips from Vector Energy
National Party energy spokesman Gerry Brownlee yesterday accused Energy Minister David Parker of having "his fingers firmly crossed behind his back" and ignoring the situation.
Mr Brownlee argued that because it was election year the Government was sensitive about launching a public power-saving campaign such as those in 2001 and 2003.
Now it was celebrating the partial recommissioning of an old thermal plant, while trying to get a moratorium on thermal generation passed into law to combat climate change.
"I get the sense that the situation's actually much more serious than anyone's letting on," Mr Brownlee said.
Mr Parker, who as Climate Change Minister wants more renewable energy, said through a spokeswoman last night that he had no problem with the recommissioning of the gas-fired plant because his office had been assured it was only temporary.
Political debate about the likelihood of a power shortage this winter has heated up in recent weeks as National has pointed to problems with a Cook Strait cable, and to a so-called emergency plant at Whirinaki burning expensive diesel.
But Mr Parker has insisted as recently as May 10 that there is "no realistic prospect of the lights going out - that's not going to happen".
Yesterday, he said blackouts were "very unlikely".
And he challenged comments from Meridian Energy suggesting domestic customers would feel price rises as a result of low hydro lake levels.
Mr Parker argued that domestic customers were not exposed to the spot market, so that was unlikely.
However, Meridian spokesman Alan Seay said last night that the firm was having to buy power from the spot market and it had to factor that into its thinking on residential prices.
The New Plymouth station shut last September after asbestos was found in areas where it had not previously been recorded on the plant's asbestos register.
In December, Contact said the station would remain closed, partly because of its age and its operational and environmental inefficiency.
Chief executive David Baldwin said staff working inside the containment area of the station would wear head-to-toe overalls, full-face powered respirators, and gloves.
Work was under way around the clock to get the plant fired up early next month.
"It's not a health and safety issue because they're fully protected. We're not paying them for risk because they're not taking any risk.
"What we are doing is saying this is a special thing and we'll remunerate you accordingly given the fact that the country will benefit from it quite significantly."
The company stood to profit from selling power into the wholesale market but this would balance out low generation from its South Island hydro dams. Contact had also been forced to buy on the spot market itself over the past few months to supply its South Island customers, Mr Baldwin said.
National grid operator Transpower, which is co-ordinating the power industry response to the threatened shortages, welcomed Contact's move as "innovative and helpful".
Chief executive Patrick Strange said the announcement was especially timely as North Island capacity problems were looming and interisland transmission was constrained.
"The grid is highly stretched and this will support it."
While only replenished lakes would remove the threat to supply, having part of the station back in action helped to buy the country time.
Dr Strange said he was aware of the warning from the National Institute of Water and Atmospheric Research that rain from now on could turn to snow and not flow into lakes in the crucial Waitaki hydro system, which can generate a quarter of the country's power.
This had been taken into account in planning and Lake Manapouri, which feeds the country's biggest hydro station, was more likely to be topped up quickly by heavy westerly rain.
