Genesis, Powerco deal on hot water

State-owned power company Genesis has done a deal with lines company Powerco, giving it better access to Powerco's 'ripple control' - hot water cylinder control system.

The arrangement allows Genesis to manage the power supply to customers who agree to be on a special tariff. Genesis will be able to cut back demand from hot water heaters and swimming pools at peak times - smoothing out electricity flows through the day.

The measures will apply to residential customers on a controlled tariff in Powerco's Western region, which covers the Wairarapa to Taranaki, and its Valley region - Coromandel and Hauraki Plains.

Genesis says the new deal will allow it to move hot water heating away from peak times in order to reduce demand on the electricity market. It hopes other lines companies will make similar deals.

However, Vector, the largest lines company, says the arrangement between the two is nothing really new for the industry.

The move is something of a trial, and would not be accompanied by any big marketing push to get more residential power users to move onto controlled tariffs, said Genesis spokesman Richard Gordon.

He said it was not yet known if the Powerco deal meant ripple control would now be used more often.

Before power companies were split up, the lines business was owned by the energy retailer. When they were broken up, the ripple control system used to manage loads went to the lines companies.

Ripple control systems are sometimes touted as a useful way of delaying the need for expensive electricity transmission upgrades.

Transpower is concerned at the load put on the national power grid, primarily at peak times.

If demand can be shifted, or smoothed out from morning and evening peaks, it could mean extra breathing space before new lines need to be built.

Powerco Chief Operating Officer Richard Krogh said the ripple control agreement between it and Genesis Energy would allow the electricity load management tool to be be better used.

"In the past ripple control has been used by Powerco at a regional level to manage network and transmission loads," he said.

"Following the agreement between Powerco and Genesis, ripple control across a number of Powerco regions will now also aid in the management of energy load which will benefit consumers and the economy as a whole, which is a positive outcome from Powerco's perspective ."

New Zealand's largest lines company, Vector would be unlikely to sign such a deal - it has different power companies as incumbents on different parts of its network.

Duncan Head, divisional manager of business development for Vector, said the company allowed access to its load management system to anyone who wanted to pay for it, when it was not needed for network management.