Meridian Energy says the owner of the aluminium smelter at Bluff wants to change the terms of a new power contract, which is due to start at the beginning of next year.
New Zealand Aluminium Smelters consumes about 15% of electricity generated in New Zealand, and exports over $1 billion worth of aluminium each year.
In 2007, Meridian signed an 18-year electricity supply agreement with Rio Tinto Aluminium to supply 572 megawatts of continuous power per year from next year.
Last year, Rio signalled it intends to sell its New Zealand and Australian aluminium assets, including its stake in the Tiwai Point smelter, and transferred the assets to a new company called Pacific Aluminium.
Meridian says Pacific Aluminium want changes to the contract, and the company is now in confidential talks with the smelter.
When the contract was signed, Meridian said the agreement would give it greater flexibility when a dry year threatened the electricity supply.