New Zealand Power-Prices dip as thermal offsets hydro

WELLINGTON, June 11 (Reuters) - New Zealand wholesale spot power prices fell from record highs in the past week as thermal power generation offset worries about historic-low hydro lake levels.

Prices at the North Island reference point of Haywards fell 3.1 percent to an average NZ$349.86 ($263.05) per megawatt hour (MWh), while at the South Island reference point of Benmore prices were 6.6 percent lower at an average NZ$386.31 per MWh.

The lower prices were something of a surprise given the fall in hydro storage lake levels, which are at their lowest since 1992.

However, an analyst said the full use of all available thermal-power generation capacity appeared to be helping.

"There's a good awareness that the probability of a severe shortage is still fairly low, and there are big rains expected later this week, and these factors have helped to keep prices from going too high," he said.

Wholesale market operator M-Co said New Zealand's stored energy over the past seven days decreased 6 percentage points to 50 percent of average.

Contact Energy's (CEN.NZ) Otahuhu-B station was back operating after a four-day outage to mend a fault, while one unit at the company's recommissioned New Plymouth station has been on line.

Hydro lakes are in the so-called "minzone", a technical level of water storage below which authorities look at possible conservation measures or the greater use of standby thermal plants.

The government said on Monday it would institute a campaign to promote energy conservation if there was no significant rain in the hydro lakes' region catchment this week.

Total demand rose 1.5 percent to 110,552 megawatts.

National inflows were 51 percent of average over the week to Tuesday, compared with 39 percent in the previous week.

In the South Island, where virtually all power is produced by hydro power stations, inflows were 45 percent of average compared with 32 percent the previous week, while North Island inflows increased to 68 percent of average from were 60 percent.

The analyst said power generators were now looking to mid-late July as the key period to assess whether there will be enough storage in the lakes to see out the remainder of winter.

A prolonged spell of dry and mild weather since late last year has severely reduced flows into the hydro lakes. ($1=NZ$1.33) (Reporting by Gyles Beckford; Editing by James Thornhill)