NEW ZEALAND, Oct. 18, 2000 (The Southland Times)—Successful shutdowns at Manapouri power station at the weekend suggest Meridian Energy’s second tailrace project has been saved from “economic ruin.”

Power station owner Meridian took Contact Energy to court last month claiming prices it charged for power during a construction shutdown in May would mean “economic ruin” for the project.

However, there were no power price spikes during two shutdowns at the weekend and it is understood talks between the power generation giants are clearing the way for the tailrace to be completed.

A clerk at the High Court said yesterday they expected a development within a couple of days. It is understood Meridian plans to withdraw its action.

Meridian took action in the High Court at Auckland after Contact hiked its power prices in May when Manapouri was shut down to allow work on the second tailrace.

Meridian was forced to pay up to $500 a megawatt hour to guarantee power to New Zealand Aluminium Smelters plant at Tiwai Point. The average price at the time was $39MWh.

It called off the planned two-day shutdown after just 18 hours but still ended up with a bill for $3.65 million.

In an affidavit to the court Meridian chief executive Keith Turner said Contact’s prices were “extortionate.” If repeated in December during a planned 21-day construction shutdown, the power bill would be $80 million and would make the second tailrace non-viable.

“The price Contact set at Tiwai during the shutdown would be more than sufficient, if repeated during the 21-day outage, for the project cost to exceed this maximum limit,” Dr Turner said.

Manapouri was shut down twice at the weekend, between 11.30pm on Friday and 10am on Saturday and from 11.30pm on Saturday to 10.30am on Sunday.

A further shutdown planned for 7pm on Sunday to 7am yesterday was cancelled. The shutdowns were the first of eight planned this month and next.

Wholesale energy market operator M-co pricing manager Shane Dinnan said there were no power price increases at the weekend related to the Manapouri shutdowns. South Island prices remained about $24MWh.

Meridian’s court action was an attempt to enforce an agreement it believed it had with Contact on prices but by Friday’s shutdown, Justice Anderson had not returned a decision.

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