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New Zealand manufacturers warn of continued power price crisis

New Zealand’s Employers and Manufacturers Association (EMA) issued a warning Tuesday, that despite electricity prices starting to stabilize, the country’s power price crisis is far from over. The association plans to hold a seminar along with the Herald and the Energy Efficiency and Conservation Authority to explain more about the technical reasons for the crisis, and to help businesses manage the associated risks.

“While the high spot price extremes for power have dropped back, electricity users coming off contracts over the next eight-ten 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.”

Thompson said that employers 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,” said Thompson.

Predictions for rainfall through to October are average to below average, with the likelihood of a dry summer resulting in a similar situation next year.

The EMA believe that there are important lessons to be learnt from the current crisis given New Zealand’s 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, say the association. The propensity for this year’s crisis repeating in future is why EMA is conducting the emergency information seminar for business.

Speakers at the seminar to be held on Friday 7th September include, Dr Doug Heffernan, chief executive of Mighty River Power, Dr Patrick Strange, Chief Executive of Vector Network, Rob Harpur, New Zealand Tax and Fuel Consultants, Graeme Perfect, Employment Consultant with EMA, and Peter Whitehouse, Energy Advisor of Business New Zealand.