Save power now or it will get nastier, warns Hodgson

By VERNON SMALL deputy political editor

The Government is warning that hot water heating cuts will be needed if power savings or higher hydro lake levels don't materialise.

"It begins with that and moves from there until it gets nastier and nastier," Energy Minister Pete Hodgson said yesterday.

In the meantime, individual power companies would be left to choose when to make cuts.

Mr Hodgson said cutting water heating would not save a lot of power, because it needed to be heated again.

"It is mainly a load-shifting thing, but there is some conservation."

Average electricity savings over the last seven days have dwindled to 5.2 per cent, well below the target of 10 per cent over 10 weeks needed to avoid blackouts.

Cold weather across the country has sent demand soaring again after a 10 per cent trim was achieved the previous week.

"I am not at all concerned that we are failing to get there," Mr Hodgson said after a meeting with industry and consumer groups.

"Week one was 5 per cent because we were learning how to do it. Week two was 10 per cent because we'd learned how to do it, and week three was 5 per cent because it was too cold."

Savings rebounded to 7.9 per cent on Sunday and Mr Hodgson called for greater efforts this week.

So far the country had conserved 264 gigawatt hours, equivalent to Hamilton's annual household electricity use.

He said a range of contingency measures would cut in if lake storage levels reached critical lows of between 600 and 800 GW hours.

Levels had stabilised at just over 1300 GW hours since he warned last month that there was a moderate risk of blackouts.

Power savings had lessened the possible economic impact, estimated to reach 0.2 per cent of gross domestic product if the 10 per cent savings target was met, but he warned the damage to the economy could get worse.

Yesterday's meeting rejected an early start to daylight saving.

Mr Hodgson said putting the clocks forward in mid-September, rather than the due date of October 7, would annoy "cow cockies" and impose unnecessary inconvenience.

It would not save much power because lights would need to be on for longer in the mornings.

Although water heating cuts would be the first move, the Government was hoping to avoid that.

"If you start invoking contingency plans, inconvenience is the result or costs.

"What we are trying to do is avoid both by asking people to put up with minor inconvenience now to avoid this other stuff later."

He criticised Treasury's suggestion that prices be increased for retail customers to encourage them to reduce demand.

"I would say to Treasury ... we have done a whole lot better, New Zealanders have done a whole lot better, by deciding to use their electricity wisely than by the blunt method of a power price increase.

"If you had taken an economist's view of that, you would not have got the response of 5, 10, and 5 per cent savings."

He said for some companies the marginal cost of electricity was $1 a unit. "They just need it."

A secondary market, allowing companies to auction power they do not want, is to start on Monday and national grid operator Transpower plans to sell some of its power.

Feature: Electricity

Energy Efficiency and Conservation Authority