The country is steadily redeeming itself with energy savings after a dismal performance last week.

Figures released yesterday by electricity watchdog M-Co show savings of 13.7 per cent nationwide on Wednesday, 3.7 per cent above the mark Energy Minister Pete Hodgson has asked for.

Tuesday's savings were 12.3 per cent.


But average savings over the past week are still below target at 7.8 per cent after the power-using spree during last week's cold snap.

Weather scientists say the power crisis will likely recur next year because of inadequate rainfall.

Charles Pearson, of the National Institute of Water and Atmospheric Research, says the institute has predicted average to below average stream flows into South Island hydro lakes between this month and October.

But Lake Pukaki and Lake Tekapo, which store up to 56 per cent of New Zealand's hydro capacity, need above-average spring rainfall and a good melting of snow in November to return to normal levels.

"If we don't get the spring rains as much as we need, there could be problems next year," he says.

The last time drought caused a major power crisis was in 1991-92.

But good winter rains in the Lake Taupo area next year could offset insufficient spring rains in the South Island, Mr Pearson says.

His comments come a week after a Treasury report obtained by the Herald said that Government officials were worried the crisis could enter a second year if there was not enough rain over spring and summer to top up the lakes.


The crisis has hit some schools and businesses hard, with at least one school facing an increase in its power costs of up to 400 per cent.

On Energy, now owned by Genesis, has recently switched at least six Wellington schools and several businesses to the spot power market, where they must pay wholesale prices.

Wellington High School principal Prue Kelly says the school's bill has shot from $7000 in June to more than $20,000 last month despite two weeks of school holidays in that period.

A spokeswoman for Education Minister Trevor Mallard said yesterday that five principals had approached him about the increases.

Consumers' Institute chief executive David Russell said power companies were taking "hard-nosed commercial advantage" of high wholesale prices to offer fixed contracts at much higher rates.

He advised schools and businesses to broker some kind of temporary arrangement rather than get stuck in a long-term contract where they would eventually pay more.