Genesis Energy is warning the Government it can no longer incur the costs of keeping power flowing during an electricity crisis.
The 1000MW coal and gas plant at Huntly burned full throttle during the last dry winter.
The costs of keeping the plant going so it is ready for a crisis pushed Genesis Energy from a profit of $99 million to a loss of $136 million in the year to June.
Revenue fell by a fifth to $1.957 billion due to lower wholesale prices and reduced generation.
Chief executive Albert Brantley says the Huntly plant will be available to generate electricity only if it remains economically viable.
He says the company will gradually close the plant.
However, Energy Minister Gerry Brownlee says the Huntly coal and gas plant won't be closed.
He told Morning Report that Genesis Energy has entered a hedge contract with Meridian Energy to keep the plant active, meaning it will be less of a financial risk.