The mayor of Ruapehu District Council is pushing government ministers to step in with a support package to keep processing businesses in his region afloat as they grapple with soaring electricity costs.
Earlier this month mayor Weston Kirton drew attention to a rapidly emerging national crisis, highlighting two timber processing factories in his district that are facing closure due to exorbitant increases in their energy costs.
The Tangiwai and Karioi mills on State Highway 48 between Ohakune and Tangiwai are critical employment sources for the region with almost 300 staff between them. Many of these people either live in Ohakune or travel from as far afield as Taumarunui.
Winstone CEO Mike Ryan had told Stuff the plants are no longer viable, having suffered a 600% increase in their electricity prices since 2021.
“We simply need to put the call out to [Associate Energy Minister] Shane Jones and the government. We are not experts on the electricity market and how you can resolve the issue, but we are on the receiving end of its outcomes which are bringing grief to our communities that will need to be propped up as a result of this,” said Kirton.
He said regardless of which government is responsible for the position the energy market is now in, it was up to the current government to deal with it.
“We need a Band-Aid to deal with this, and we need it now.
“We now have some of the highest electricity prices in the western world, we are not in a good place and options are limited. I understand government is talking about importing liquid natural gas, but that would be at least six months away.”
Jones told Radio NZ the Electricity Authority is a “chocolate teapot” when it comes to enforcing generator-retailer pricing behaviour.
Kirton and his council are supposed to be meeting this week with their local MP Barbara Kuriger, who was in discussion with Finance Minister Nicola Willis.
“We are hoping to get some sense of where they are heading, but as we see it there is only one way and that is to prop it up until a longer-term solution is found. The ‘do nothing’ option is far worse.”
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Meantime in the background the energy sector is in discussion on how to avoid blackouts in coming months, including how to free up more water from the hydro lakes for generation.
These are themselves compromised, running at only 50% of their long-term average for this time of year, while gas supplies remain constrained.
The lakes now sit at the bottom 5% of their historic recorded levels.
This winter has also been particularly calm, reducing wind generation’s contribution.
“There is some irony here in a country with so much water, while wind is not doing it. Sustainables are not enough. From what I understand NZ needs to double its electricity supply to meet future needs. Things are biting us now,” said Kirton.
The Ruapehu district has been hit hard in recent years with the financial issues that struck the operator of the Whakapapa ski field. A $7 million grant was made in March to Ruapehu Alpine Lifts, also by Jones and cited by him as the last the field would get.
An additional $3.05m has been pledged in equity and loan funding to enable the sale of Turoa ski field.
In Focus Podcast | Power prices hit rural pockets
Skyrocketing power prices are hitting farmers and processors hard. Senior reporter Richard Rennie says it looks like a challenge that will be here for some time as there’s no obvious fix on the horizon. Meat and dairy processors, orchardists and irrigators are all grappling with the problem and many are looking for efficiencies and ways to trim costs in other areas.
