Power prices still in crisis

Media Release Tuesday, August 28th, 2001

Power prices still in crisis

Though the supply of electricity may be starting to stabilise, the crisis for power prices is far from over, says the Employers & Manufacturers Association (Northern).

The Association is organising an emergency seminar on the crisis at the Hilton in Auckland to be held on Friday, September 7th.

The seminar is in association with the Herald and the Energy Efficiency and Conservation Authority and is to explain more about the technical reasons for the crisis, and to help business manage the associated risks.

"While the high spot price extremes for power have dropped back, electricity users coming off contracts over the next 8-10 weeks can expect price increases to keep coming through," said Alasdair Thompson, EMA's chief executive.

"The price rises are likely to be as high as 30 per cent or more.

"Employers also need to know how to manage their staff commitments too, if the electricity shortages continue, because people can't just be sent off on holiday, or made redundant without observing the right procedures.

"Businesses need to know the options and implications of signing renewal contracts for two or three year terms compared to toughing it out and exposed to spot prices until normalcy returns. The market and supply situation is still highly volatile.

"NIWA is predicting the rain fall through to October will be average to below average, with the likelihood of a dry summer seeing us face a similar situation next year.

"There are important lessons to be learnt from the current crisis given our dependency on small reservoir hydro systems. The rain may fall and the lakes may fill but the underlying problems will not be washed away so easily. The propensity for this year's crisis repeating in future is why EMA is conducting the emergency information seminar for business.

Addressing the EMA breakfast seminar are;

* Dr Doug Heffernan, chief executive of Mighty River Power, on the risks and contingency plans businesses face in today's electricity market

* Dr Patrick Strange, Chief Executive of Vector Network, on the options that line companies can deploy to ration electricity

Rob Harpur, New Zealand Tax and Fuel Consultants, on risk management

* Peter Whitehouse, Energy Advisor of Business New Zealand, on the economic fall out likely from current and future power shortages.

* Heather Staley, Chief Executive of EECA, will walk through EECA's subsidised energy audit scheme, as well as sustainable energy conservation

strategies.

* Graeme Perfect, Employment Consultant with EMA, will discuss the ramifications of power shortages or cuts on employment relations agreements, holidays and health and safety issues.

Further comments; Alasdair Thompson tel 09 367 0911 (b) 09 303 3951 (h) 025 982 024

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