Electricity prices fall rapidly as hydro lakes fill

Electricity prices have fallen rapidly as water continues to flow into key hydro system lakes, easing fears of problems with this winter's power supply.

Latest information from electricity market administrator M-co shows its electricity price index, a seven-day rolling average, down to 7.55c per kilowatt hour on Sunday from 12.68c a week earlier.

The latest value is almost the same as the 7.49c of a year earlier but still well below half the 17.93c of a month earlier.

At the start of April, the amount of water stored for hydro generation had stood at 65 per cent of average, as low as at the same time in 1992 -- when the country last faced a major power shortage.

But rainfall since then has raised hydro lake levels, with Meridian Energy spokesman Alan Seay saying storage was today at 89 per cent of average.

In the North Island, levels were 210 per cent of average, while the South Island figure was 75 per cent.

Levels in the Waitaki catchment, which provided about a quarter of the country's power, were up 31 per cent on four weeks ago.

"I would say we're feeling a lot easier than we were 10 days to two weeks ago, but we could still use some more rain," Mr Seay said.

"I would hesitate to say we're out of the woods. Another inflow like the one we received last week I think would give us a measure of comfort."

Hydro storage levels were now considerably better than at the same time in 2001 and 2003, the two most recent years in which there had been problems.

Figures from M-co, which says hydro systems provide about 70 per cent of the country's electricity, show inflows into hydro lakes to have been above average every day last week.

On Sunday, the price at the Haywards North Island reference point in the Hutt Valley was 5.78c, down from 15.51c a month earlier, but still above the figure of 4.83c a year before.

The price on Sunday at Otahuhu was 5.38c and at Benmore it was 5.94c.

- NZPA