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Speaker 1: So we have yet another casualty of the high power prices.

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Speaker 1: The country's largest gas user, method X, has stopped production

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Speaker 1: until the end of October because there just simply isn't

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Speaker 1: enough gas to go around. It's going to sell the

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Speaker 1: gas that it would have used instead to Contact Energy

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Speaker 1: and Genesis, And Mike Fusia is the chief executive of

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Speaker 1: Contact Energy with US.

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Speaker 2: Now, Mike, hi, are you doing that? Adam?

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Speaker 1: I'm well, thank you. How much you're paying for the gas?

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Speaker 2: I can't say that that's obviously commercially sensitive, but we're

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Speaker 2: paying a fair price for the gas given the circumstances.

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Speaker 1: Are you paying more for the gas than you would

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Speaker 1: pay just on the open market?

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Speaker 2: Well, the open market has been as high as fifty

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Speaker 2: dollars a GJ, So no, we're not paying probably not

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Speaker 2: paying that much, but we're paying a fair price. It's

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Speaker 2: fair to.

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Speaker 1: Say any idea how much this is going to cost

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Speaker 1: the country because obviously we're going to lose, right because

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Speaker 1: they're not exporting any methanol.

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Speaker 2: Now, look for the bulk of New Zealanders. It won't

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Speaker 2: affect them in any way form of fashion. As a

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Speaker 2: market flip for the wholesale market, ninety five percent of

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Speaker 2: Kiwi homes and businesses are there not on time of

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Speaker 2: use contracts. They're not exposed to the wholesale spot market.

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Speaker 2: And what our focus has been on making sure those

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Speaker 2: entities that have exposure is calming the market down through

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Speaker 2: deals like this and just getting on with it.

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Speaker 1: Yeah, but I mean you would accept that the country loses,

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Speaker 1: right if we're not exporting methanol from methd X.

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Speaker 2: The country does end up losing some export earnings. But ultimately,

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Speaker 2: if in the long term we've found a way that

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Speaker 2: will secure methd x is future here through its ability

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Speaker 2: to flex like this, just like the smelter, that's actually

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Speaker 2: a win long term for New Zealand.

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Speaker 1: Okay, Yeah, that's a fair point. Does this mean that

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Speaker 1: we're going to avoid spring outages?

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Speaker 2: Absolutely? In terms of the security of supply, that's where

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Speaker 2: our focus is at the moment, and we're very confident

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Speaker 2: that we'll be able to see the country through.

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Speaker 1: Is it going to bring down the prices that we

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Speaker 1: are paying currently for electricity and talking about the spot

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Speaker 1: prices obviously.

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Speaker 2: Oh, the spot prices will come off. You've already seen

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Speaker 2: the futures market which we have is that the futures

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Speaker 2: market has calmed down considerably. A year out, it's come

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Speaker 2: down I understand about forty to fifty dollars, and so

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Speaker 2: you're seeing everything starting to calm down.

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Speaker 1: Now, are we going to have to do this next winter?

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Speaker 2: Well, look, we sincerely hope not. We've got a couple

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Speaker 2: of powerstations which should be online by then. We've got

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Speaker 2: the demand flex in both meth and X and the smelter,

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Speaker 2: and if we can continue to develop those demand flexes

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Speaker 2: from ourgin industry, and we should see I think there's

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Speaker 2: a couple more wind farms coming on, and if we

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Speaker 2: get the rains we need, I think next winter should

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Speaker 2: be fine.

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Speaker 1: Mike, thank you very much, really appreciated. Mike's fugue, chief

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Speaker 1: executive of Contact Energy.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news talks.

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Speaker 1: It'd be from four pm weekdays, or follow the podcast

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Speaker 1: on iHeartRadio