Meridian had been managing its hydro lakes carefully for months now, “but there’s nothing like a helping hand from Mother Nature”, Ewers said.
Pūkaki had been below average for more than 150 days, and at historically low levels as recently as mid-August, before weeks of heavy rain and snowfall changed the outlook.
Over the last week, Pūkaki rose 715mm to just over 525m above sea level – 102% of average for this time of year.
The last few weeks exceeded Meridian’s expectations.
“September felt wet, and it was. The Waitaki catchment, which feeds Lake Pūkaki and the Waitaki Hydro Scheme, had its fourth-wettest September on record,” Ewers said.
In the mountains above the Waitaki catchment, snow storage is now sitting at 117% of average.
“That’s great news for later in the season as that snow melts and feeds the lakes throughout the warmer months,” Ewers said.
“After a challenging winter, we couldn’t have asked for a better start to spring.”
The historical average level of Lake Pūkaki changes over the course of the year and spring is generally when levels are at their lowest, due to high demand for electricity and less rainfall throughout winter.
Last week, WPI shut its mills after operating for 45 years in the Ruapehu District.
WPI – unlike most big industrial power users – was a direct participant in the wholesale electricity spot market, which can be extremely volatile.
Most large businesses and independent retailers are on long-term contracts.
Large customers can also hedge against future prices through ASX Futures Market.
Less than 0.1% of all of Meridian’s customers have spot market exposure, the company says.
The Electricity Authority, which is responsible for the governance and regulation of New Zealand’s electricity industry, has a stress-test regime for those with exposure to the spot market.
Such buyers are required to provide a quarterly report to an independent stress test registrar, signed by one of their directors, their chief executive or chief financial officer, saying they have considered the impact on their cash flows of spot prices rising to $400/MWh for three months and to $10,000/MWh for eight hours.
Last month, Oji Fibre Solutions confirmed it had closed its Penrose Mill closure, with the loss of 75 jobs, laying part of the blame on high power prices but also citing rising freight and labour costs for the closure.
Last week, national grid operator Transpower said 2024 had been challenging for New Zealand’s power supply and there was a risk supply could be again constrained in 2025.
It said the increased risk for 2025 reflected constrained thermal generation due to reduced gas production and return of gas by Methanex to the petrochemical sector, the retirement of the Taranaki Combined Cycle unit, and the largest Tiwai demand response products not being available in consecutive years.
In the midst of August’s price spike, Methanex – New Zealand’s biggest gas user – agreed to sell gas to Contact and Genesis to run their thermal power generation plants, which serve to back up the hydro-dominated system when lake levels are low.
The arrangement runs out at the end of this month.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
