Users' group slates `abuse'

By FIONA ROTHERHAM

The Major Electricity Users' Group says any dramatic increase in electricity prices this weekend during the planned shutdown of the Maui field will be an abuse of market power by generators not reliant on gas.

The 70-hour shutdown of the Maui pipeline starts early tomorrow morning, forcing the shutdown of four gas-fired generation plants.

At this stage, it appears there will be sufficient electricity generated to "scrape through" the outage. But there is little spare capacity above estimated demand and a risk of North Island power cuts if any failure occurs.

Transpower, operator of the national grid, can order lines companies to shed load if required.

Some generators have predicted the spot market price for electricity will leap.

Electricity is traded by each generator bidding prices into the wholesale market on a half-hourly basis. The spot market reflects what price the buyers and sellers are prepared to pay at various points nationwide. Of late, these prices have been volatile.

Major Users Group chairman Terrence Currie said consumers did not expect to be exploited by their energy suppliers bidding opportunist prices into the price-setting process.


The association's members account for up to 28 per cent of total electricity consumption.

The cost for most of these big users is directly linked to the spot price.

Some will have at least part of their demand covered by forward hedge contracts while others have contracts allowing them to shed load once alerted that the spot price has gone above a certain level.

Mr Currie said some domestic consumers had signed contracts with new suppliers where their monthly bill was directly linked to the spot price plus the retailer's margin.