The Guardians of Lake Hawea are upset Contact Energy has applied to the Electricity Commission to lower the lake to 336m, because dropping it to similar levels in the past has caused widespread environmental damage, including dust storms and erosion.
The Guardians will meet tonight to discuss their response to the energy crisis, but Guardians chairman Grant Fyfe did not want to comment yesterday.
However, Lake Hawea Community Association chairman Errol Carr is threatening to protest if the water drops as much as 1mm below 338m.
He said everyone in the community - including small children and dogs - could march.
"The community is seriously [annoyed] but we don't really want to pre-empt the Electricity Commission.
"There is still 15cm to go. There is some leeway. It has been at that level since June and we don't really want to inflame things," Mr Carr said.
However, he added the Government and Transpower were not "fessing up" to a national crisis and transmission problems.
Lake Hawea was at 338.15m yesterday afternoon.
To draw the lake down to 336m would take 20 days, locals said.
Contact Energy said it did not really want to lower the lake any further, but felt forced to consider it because of low rainfalls and problems transmitting power south from the North Island.
"If we did need to do it [lower Lake Hawea], it would be local water being used as a solution to a local problem," Contact Energy spokesman Jonathan Hill said yesterday.
The situation was "quite serious" and the company had been discussing the issue with the local community, he said.
Contact Energy has resource consent to lower the Hawea storage lake below its statutory minimum operating level of 338m in certain conditions.
The lake's reserve capacity can only be accessed if reserve generation is required and Contact Energy wanted to clarify that with the commission.
The situation was being assessed daily, but there was a "clear case for beginning to use the additional 2m" to improve the security of supply in the lower South Island, something the company did not do lightly.
Mr Hill believed the South Island was basically in the same power pressure position the whole country found itself in at the start of winter.
On the positive side, spring was almost here, which should bring some snow melt and a drop in electricity demand.
A spokeswoman for Energy Minister David Parker said, when contacted yesterday, the minister acknowledged it would be better not to have to draw down the lake further, but the Government did not control rainfall and understood Contact's "serious" position.
Meanwhile, the North Island had lots of generation capacity, creating an unusual situation. Mr Parker had announced a savings campaign earlier in the winter, but there was no benefit in North Islanders saving power, the spokeswoman said.
Asking South Islanders to conserve power was difficult when it was colder in the South.
"This is a strange and localised problem. To declare a power savings campaign just for South Islanders might be strange and might not go down too well," she said.
- Andrea Jones and Marjorie Cook