Power Cuts Loom In New Zealand's Electricity Crisis

Only rain or greater electricity conservation can stave off supply cuts, said Finance Minister Michael Cullen.

``Power will have to be rationed. There is no way round this,'' he said.

The government urged people last month to slash nationwide electricity use by 10 percent, as the Southern Hemisphere winter sets in. So they've managed only 4.5 percent.

Nearly three-quarters of New Zealand's power is hydroelectric. Water levels in lakes that drive power plants have dropped by about 55 percent after two years of dry weather.

Forecasters say the dry spell could continue for months.

Natural gas supplies also are under pressure because of lower-than-expected reserves at the giant Maui gas field.

Patrick Strange, head of the government's Winter Power Taskforce, said the 4.5 percent savings were ``the most encouraging sign so far'' that consumers were heeding calls to save power.

But he added the situation was ``serious,'' and ``we need the 10 percent saving.''

It is not only households that face the chill.

The country's industrial and commercial sectors have already reported nearly 35 million New Zealand dollars (US$20 million) in losses from production cuts made due to rocketing wholesale power prices.