Power prices hit low but users likely in dark

Electricity prices are at a three-year low, at the very time people are using less power.

But, despite the low prices - which have reached 48 times lower than the peak last year - residential customers will notice little change as contracts buffer them from the highs and lows of the volatile wholesale market.

NZX Energy figures show wholesale electricity prices on Boxing Day dropped to $7.70 per megawatt-hour - one million watts of energy used continuously in a single hour.

The last time it was that low was on January 30, 2011.

Although the price by Sunday had risen to $30.30, it is nothing on the $370.26 reached in March last year as hydro lakes started to drop.

Wholesale electricity prices can fluctuate significantly, even within a day.

Home power bills include other costs such as lines charges and a percentage to keep the high voltage grid running.

Demand for electricity was traditionally lower around the Christmas and New Year break as offices closed and people went away, an NZX Energy spokeswoman said.

Meridian Energy spokeswoman Michelle Brooker said the windy conditions of the past week meant 12 per cent of the country's power was coming from wind farms.

Normally the figure was about 10 per cent.

But the ferocious winds through Wellington - which reached 140kmh gusts on high peaks on Friday - did little for electricity supply because turbines were turned off in such conditions.

Meridian's Makara wind farm, west of Wellington, has 62 turbines and is the company's biggest in New Zealand.

Slow demand for electricity at this time of year, combined with high rainfall in the South Island, meant water in the Waitaki dams at lakes Benmore and Aviemore was being discharged via spill water canals.

Despite the dams being at capacity, there was no guarantee a water shortage would not happen later in summer, she said. "You just can't tell. We have only got so much storage."

Electricity Authority acting chief executive Bruce Smith said the current low prices would have little impact for residential consumers, who tended to be on fixed price contracts so were insulated from the highs and lows of the wholesale market.

"The current low wholesale prices are not a particularly good indicator of future wholesale market prices since the hydro storage situation can change dramatically within a few months."

The Dominion Post