Electricity crisis fuels jobs fears

By MATHEW DEARNALEY

Unions are backing the appeal for national power savings because of fears of job losses if householders do not switch off enough lights and appliances.

The Engineering, Printing and Manufacturing Union says up to 2000 of its members have been hit in the pocket by overtime cuts or altered working hours at a dozen or more companies which are trying to counter soaring spot power prices.

Most employers say they are coping without layoffs, but some are believed to be considering them unless the crisis eases.

The Winter Power Taskforce said yesterday that electricity savings climbed to 5.3 per cent on Sunday and that hydro lake storage levels were at 67 per cent of average after heavy rain.

This compared with savings of 4.7 per cent on both Saturday and Friday, and storage of 64 per cent at the end of last week.

But taskforce co-ordinator Dr Patrick Strange, who oversaw a blitz of business districts by energy savings teams in four cities yesterday, said there was still no room for complacency if people wanted to avoid extended water-heating cuts.

Union secretary Andrew Little said he could understand people feeling angry at being asked to switch off appliances because the electricity market had yet again failed to meet demand.

"But we need to put aside our rights for now and concentrate on what we need as a society," he said.

The biggest overtime cuts have been at Pacific Steel in Auckland.

Production there stopped several times in late March before the company rearranged operating cycles to focus on weekend work, when power prices are lower.

This is believed to have led to a weekly loss of at least $200 for most of about 90 workers in the plant's rolling mill, although those involved in smelting steel get the compensation of weekend penal rates.

The union's senior rolling mill delegate, Nigel Willcox, said the management warned workers at a meeting yesterday not to expect this arrangement to be changed until the end of August.



Fletcher building and steel group chief executive Andrew Reding said the mill was producing only about 85 per cent of its normal output, at the cost of export markets which might not be able to be rebuilt.

Mr Reding could not rule out job cuts at some stage, but he said a drop in demand from farmers for the company's wire products would be the main cause in such an event.

It is understood Fletcher Wood Panels is having trouble avoiding layoffs at its medium-density fibreboard plant in Taupo, because it is a seven-day a week operation with less flexibility than the steel mill.

Another hard-hit plant is the Japanese-owned Pan Pac Forest Products pulp mill in Hawkes Bay, where production stopped for the day on Friday.

Another stop is planned in 10 days.

General manager Doug Ducker said the mill's 350 workers were asked to take annual leave for those days.

A further 360 employees of logging contractors servicing the mill were also stood down.

Carter Holt Harvey's toilet and tissue plant in Kawerau has had to curb pulp exports to maintain paper production, meaning reduced overtime pay for its 286 workers.

But its operations manager, Murray Lucas, said spot-market electricity prices had settled down from the excesses of recent months, although they were still four times higher than normal.

Kawerau newsprint producer Norske Skog, which has 700 mill employees and is the largest electricity user after the Comalco aluminium smelter at Bluff, says it is trying to absorb costs rather than risk losing hard-won markets by cutting production.

Comalco has been producing 10 per cent less aluminium than normal since late March but has not cut the salaries of its 800 employees.