The Major Electricity Users Group, which represents the country’s largest energy users including Fonterra, Woolworths, Oceania Gold and Rio Tinto, says a voluntary electricity conservation campaign should be considered ahead of, or to avoid, a forced one that would affect "all consumers".
The comments come after national grid company Transpower asked for feedback on a proposal to allow the hydro generators to access "contingency storage"— which is stored hydro that is only made available for generation at specific times to mitigate the risk of shortage — much earlier than normally allowed.
Several groups have submitted on the proposal and while most supported it, some accused Transpower of not taking the situation seriously enough.
The Major Electricity Users Group supported the proposal, but said other tools, including conservation campaigns, should be considered.
"What is missing from discussion is the acknowledgement by regulators that the electricity system is actually in a crisis situation, not just approaching one – customers are already having to curtail their demand."
Pulp and logging firm Pan Pac said in a separate submission it was losing $2 million per week in export revenues after being forced to shut its Whirinaki facility due to high power prices.
It said Transpower needed to initiate a "soft launch" to the public of the opportunity to "voluntarily reduce electricity consumption now to avoid a future enforced conservation campaign".
"[Transpower] will need to show leadership and rise above any political pressure applied to ‘downplay’ the risk situation.
"Pan Pac’s lessons from the damage inflicted to our site during Cyclone Gabrielle is that Kiwis are very adaptable and innovative when faced with a crisis — but they need clear and unambiguous communications to bring out the best in people."
A submission on behalf of independent electricity companies 2degrees, Electric Kiwi, Flick Electric and Octopus Energy supported the proposal and said a crisis was looming.
"We do note that the fact that this change is being made now, with such urgency, is indicative of a clear failure by Transpower, as the system operator, in its obligations to model, monitor and report energy-system risk.
"This raises concerns about the Electricity Authority’s oversight of the system operator and the key role [Transpower] plays in ensuring system security."
Business NZ’s energy council said the situation was worse than portrayed.
"If rainfall remains scarce over the coming months, and gas-supply shortages persist, accessing contingent water reserves will be essential to mitigate the heightened risk to system security and help towards ensuring the lights stay on."
It was recognised the decision would affect lake levels, recreational activities, shore erosion and dust.
"However, given the increasing threats to energy security and the critical need to maintain the electricity system’s stability, accessing these reserves takes precedence over short-term ecological impacts."
Transpower has said hydro lake levels had fallen to just 55% of average for the time of year, putting them in the bottom 5% of historical records.
Meridian Energy’s submission said there was a significant risk that Lake Pūkaki storage will continue to decline rapidly and reach 518m above mean sea-level (AMSL).
The generator-retailer said accessing contingent storage was "extremely challenging, if not impossible, in many scenarios".
"The change to the buffer should take effect as soon as Transpower makes its decision and Transpower should complete a decision as soon as possible.
"Industry participants, particularly operators of reservoirs that contain contingent storage, need immediate clarity regarding how the current infeasibility will be overcome under the electricity risk-curve framework. Operational planning relies on this clarity."
Guardians of Lake Hawea submitted against the Transpower proposal.
"A fast-tracked quick-fix solution to a long-known problem is not what is needed to future proof our national electricity supply. Electricity supply resilience is something that has been discussed by successive governments with little to no action forthcoming."
Transpower said it would comment further on the situation after it made its decision at the end of the week.
