Jun 26 - Dominion Post

Hydro-power lake levels are holding up at 55 per cent of average, with more rain expected in the next few days, but wholesale power prices remain stubbornly high.

State-owned Meridian Energy said that with normal, or even slightly below-average, rainfall in the South Island from now, it would get through winter "without any hiccups".

Market-watchers say the country is "not out of the woods yet". Generators have not yet been tested by a big cold snap, which could increase generation demand by about 10 per cent. There is also the risk of a power station failure or trouble with the Cook Strait cable.

South Island hydro lakes got heavy rain just over a week ago, and a little more in recent days. "We are expecting a reasonably wet week this week," Meridian spokesman Alan Seay said.

Major Electricity Users Group chief executive Ralph Matthes said the picture was getting better, but even with a further 90 millimetres this week, the storage would still be short of an "all clear" for winter.

Though wholesale power prices had remained high, a big rainfall in the south should cause spot prices to drop sharply, he said.

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