Energy security will cost consumers money, Government says

12.00pm

New Zealanders are going to have to decide whether they want to pay a little more for electricity to avoid dry year risks of shortages, Energy Minister Pete Hodgson said today.

He said an energy saving campaign was being planned in case this winter was another dry one, but it would be quieter and more gentle than the last (in 2001).

"Any hydrologist will tell you it's far too early to call it anything resembling a crisis," he told reporters.

"If it rains, we'll all go away and find something else to talk about. If it doesn't, then it's as well that we have begun some prudent energy conservation measures now, to get water in the bank, so to speak."

Mr Hodgson said he had been talking to the electricity industry about that.

"They, and I, are thinking of a quieter, longer-term savings campaign in case things go bad, rather than doing what we did last time, which was wait until closer to the time then have a harsh savings campaign," he said.

"In the meantime, everyone may want to ask the question -- is it a good idea to turn off a light, save a bit of money and contribute to some other New Zealander who is having difficulty with their job because they're in a high-energy industry."

Prime Minister Helen Clark signalled yesterday there were major changes ahead for the electricity market.

She said the Government believed the current market model was delivering "unintended consequences" and changes were being contemplated.

Mr Hodgson said today there were a lot of ways the Government could intervene in the market.

It could, for example, be regulated so that it had to have more capacity than was going to be needed.

"Those ways all come at a cost," he said.

"We've got to decide, as New Zealanders, whether we want to substantially avoid dry year risk and pay a little more for our electricity for that avoidance.

"Do we want more security for which we are prepared to pay slightly higher prices, or are we prepared to run into trouble every now and again and continue to have lower-priced electricity?

"That's really the public debate that we all need to get our heads around," he said.

- NZPA

Herald Feature: Electricity

Energy Efficiency and Conservation Authority