Genesis Energy's head office in Auckland. Photo: Supplied / Genesis Energy
Genesis Energy says it is doing its bit to deliver energy to New Zealand and sudden changes to power market rules can be unfairly costly.
This comes after Transpower, the grid operator, announced it would allow generators to access more water from hydro lakes to combat the country's power supply problem.
Genesis has posted its full-year profit, which fell to $131 million due to low gas, hydro and wind levels and an outage at its Huntly power station.
Costs increased for the company as it had to burn more coal to make up for the shortages.
Chief executive Malcolm Johns said his company's customers have been protected from the volatility in the sector.
"We've put $160m more into fuel in the last 12 months... We've just done a deal with Methanex. We've ordered substantially more coal. We feel that we're carrying our fair share of the burden at the moment, probably more than our fair share of the burden of delivering energy to New Zealand.
"It's a very high risk position to take on fuels like coal. If you order the coal, it's three to six months to get it here. If Mother Nature turns up and rains in that time, suddenly you've got a whole lot of coal that you can't turn into electricity because the price has come down."
Chief executive Malcolm Johns. Photo: Supplied / Brett Phibbs / PhibbsVisuals
Johns said Transpower changing the rules about how much water could be taken from the hydro lakes could hurt his company.
He said getting more power into the grid to tackle the shortage was important, but having clear, predictable market rules was equally crucial.
"We've just taken on some very expensive gas from Methanex to ease the wholesale price curve. So if water floods the market, we end up carrying the cost of that.
"For an organisation like Genesis, that inevitably ends up having to be asked to take on large amounts of fuel risk. In a dry year, sudden rule changes can be very costly."
On skyrocketing wholesale power prices, Johns said Genesis did supply that market and it was up to customers to decide whether to buy in.
"99.99 percent of our customers are not exposed to the spot market. So, the products we sell are available to any customers to buy and ultimately they're individual choices for those customers, how they choose to structure their risk management and energy profiles."
He said the government and regulators were responsible for problems in the overall power system.