KEY POINTS:
Transpower will step up moves to have big electricity users cut back if there is no significant rain in hydro catchments within a fortnight.
Anxiety over falling hydro lake levels prompted the national grid operator yesterday to announce intensified contingency planning to avoid power shortages this winter.
Inflows to hydro lakes this autumn are below those of 1992 when a power crisis resulted in hot water heating being cut and sweeping voluntary savings.
Although the lakes could fill to average levels after just days of heavy rain, with winter nearing the supply position is becoming more critical.
Transpower says if the rain does not come, in the first instance businesses would be offered financial incentives to cut use and as "a last resort" an energy conservation campaign launched.
Big users would be paid spot prices for power for selling back electricity into the system if they were able to cut production or move it away from peak times.
Such measures could be put on standby by the end of the month if there was no significant rain in hydro catchment areas, Transpower says.
Around 70 per cent of the country's power comes from hydro generation.
Lake Taupo feeds the Waikato River hydro system - responsible for 13 per cent of the nation's peak load - and based on inflows of the past few months, could reach the bottom of its operating range in four weeks.
A few millimetres of rain fell in the area yesterday and more is forecast this week. At Tekapo and Pukaki, levels are still comfortably within the operating range but have been falling for the past three weeks.
Transpower chief executive Patrick Strange said industry had initiated planning just in case severe drought continued, or a major plant failed.
"Both of these events are unlikely," Transpower said. "The industry is being prudent and making preparations now, so that should action be needed, there are appropriate plans in place to address any shortfall in hydro generation."
Transpower issued its statement after Electricity Commission figures showed current hydro levels had dropped below a measure called the Minzone. The Minzone is an analytical tool based on 77 years of hydro inflow information. When hydro levels dropped below the Minzone it indicated the generating system needed careful management.
The dry summer and autumn had coincided with the unexpected closure of the New Plymouth thermal generating plant due to an asbestos find; the Stratford plant out for a scheduled mid-life maintenance; a unit out at Huntly and some constraints there due to river temperature restrictions.
Contact Energy runs the 380MW combined cycle plant at Stratford and said yesterday it should be generating at full power by the end of this week.
Genesis Energy's coal and gas fired plants at Huntly have been generating at full capacity for the past three to four weeks which chief executive Murray Jackson said was good for the state owned enterprise's balance sheet but not so good for its carbon footprint.
Low lake levels had been a recurring problem for the country throughout the past six years.
"This one's been fairly sustained. Our dependence on hydro generation is just too great to the extent we're constantly sending messages to the consumer about the risk of power shortages. It sends a very bad message out to foreign investors."
The Niwa climate outlook to June offers a mixed picture for the power industry.
While warm, rainfall is expected to be normal in most places although stream flows are forecast to be below normal over most of the North Island.
