Reductions in electricity use could help consumers' pockets

3.00pm

Electricity users who make significant savings in consumption during nationwide shortages could expect credit from electricity retailers within the next two weeks.

Energy Minister Pete Hodgson and Deputy Prime Minister Michael Cullen said today efforts were being made to recognise those who made an extra effort to conserve electricity.

The Government has asked consumers to reduce electricity consumption by 10 per cent and the state sector by 15 per cent, as hydro lakes hit low levels earlier.

"I think (retailers) will be working on that (credit) sooner rather than later and I think it will probably come in a couple of forms. I think some retailers will individualise their systems and others will offer a community response," Mr Hodgson told reporters this morning.

"In some cases the benefits might flow to the individual, in other cases the community might be asked to nominate a worthwhile project or something of that sort.

"I would expect, if 2001 is anything to go by, progress on that in the next week or two."

Some electricity generators were desperate to reduce generation in case there was no substantial rainfall forthcoming in the next few weeks, Mr Hodgson said. They were keen to reduce consumption as much as possible.

He believed the 10 per cent savings was a reasonable request.

"We did it in some weeks during 2001 (during the last electricity shortage) and I think we'll see the same thing this time, it will bounce up and down, just because of the weather changes," he said.

"Within New Zealand society, there will be enough willingness and there will also be enough information ... because the Government is active. The industry is a lot more active and a lot more organised than it was in 2001."

He refused to call the shortage a crisis, saying it had not yet developed into that. Savings now could stop the situation from "turning nasty".

Dr Cullen said giving electricity savers credit was worthwhile.

"Certainly we are looking at those kinds of discount options as desirable and the companies themselves will be wanting to adjust that in a commercial frame," he said.

"It makes sense from their perspective to try and get savings now, particularly from the point of view of the hydro-based companies ..."

Dr Cullen, as a shareholding minister in the government owned electricity generators, had moved to ensure there is a sufficient coal supply.

"... I have taken a particular interest ... in terms of the coal supply for Genesis and wanting to receive assurance that everything is being done by Genesis to ensure an adequate coal supply, because the capacity to run Huntly is going to be quite crucial."

Meridian spokesman Alan Seay said a rebate in recognition of savings was likely to be introduced within the next month.

"We're looking at a range of things. It's all very well waving a few dollars under people's noses but it's also about giving them the information they need to be able to make the savings and qualify for the incentives," he told National Radio.

Meanwhile, the Major Electricity Users Group welcomed the new targets.

Executive director Ralph Matthes said the economic impact on the industrial and commercial sector had reached $18.2 million in lost sales since March 1 due to forced demand reductions.

"In addition, businesses that must continue supplying products and services to consumers have paid $12.6 million above the unit price paid by households for their power," he said in a statement.

- NZPA