Otago Southland Employers Association chief executive Duncan Simpson said continued claims electricity shortages were caused by a one-in-100 or one-in-60 year drought in the hydro lakes, were wearing thin.
"We have got a situation where they are occurring more frequently than that."
That has led to businesses asking how secure was their electricity supply.
A pre-election poll of association members revealed 93% were concerned about security of supply and 97% said that threat was adversely affecting their businesses.
Mr Simpson said with 42% of the country's foundry capacity in Dunedin, security of supply as well as pricing was a major issue.
"Virtually every business in Otago and Southland is concerned about the future of electricity supply," Mr Simpson said.
Contact Energy last week attributed soaring energy prices to transmission bottlenecks over Cook Strait and north of Wellington, and warned prices for South Island consumers would remain high for another four to five years until those issues were addressed or new generation built.
Contact chief executive David Baldwin said those constraints cost South Island consumers $150 million in higher energy costs in the past financial year, as wholesale prices rose because cheaper geothermal electricity could not be sent south.
South Island prices were as much as 10c a kWh higher than those in the north.
For much of the past winter, South Island retailers paid about 26c a kWh for North Island-generated electricity compared to a typical cost of 20c a kWh.
But Mr Baldwin said if the full cost had been passed on, it would have cost 40c a kWh.
Contact was concentrating generation development in the North Island because geothermal was cheaper than options available in the South.
It has $3 billion invested in generation projects, which will add another 1400MW of electricity to the grid, with all but the 17MW Hawea gates scheme, in Central Otago, in the North Island,A Contact spokesman said in recent years the only South Island generation projects commissioned were Meridian's White Hill wind farm in Southland, which supplied energy to adjacent consumers, and an increase in the capacity at Meridian's Manapouri plant.
That was despite the South Island's energy demands increasing 26% in the past 10 years and the North Island's 22%.
Over that same time, South Island energy generation capacity had increased just 200MW and in the north by 3000MW.
Contact pointed to the financial impact of the transmission constraints as a justification for a 10% increase in electricity prices for its South Island customers, but that has proven costly, with reports late last week the company was losing customers to other retailers.
Its share price hit a 12-month low of $6.80 on Friday afterits shares opened at $7.13.
Mr Baldwin said Transpower last year decommissioned pole one of the HVDC Cook Strait cable earlier than expected, the New Plymouth electricity station was decommissioned after asbestos was found, which removed 300MW from the grid, and finally there was drought.
Energy Minister David Parker rejected Contact's reasons for raising prices, but accepted the Cook Strait cable needed replacing, which was under way.
He said transmission congestion was not an issue nine years out of 10, and that if the hydro lakes had been fuller leading up to last winter, there would have been more than enough power for the South Island.
"On an annual basis, the South Island is still a net exporter of electricity."
He agreed it was more cost-effective to build new geothermal generation capacity in the North Island and that was the company's choice.
Mr Parker also rejected National Party plans to amend the Resource Management Act to fast-track projects such as hydro development.
The party's response to electricity pricing was to encourage competition, such as the arrival in Dunedin last week of Mercury Energy, and to wait and see the outcome of a Commerce Commission inquiry, which was imminent.
"I don't want to take premature decisions.
"Whatever we do has to be justified."
National Party energy spokesman Gerry Brownlee said the Government and Electricity Commission had failed to secure electricity supplies.
The Government had had nine years to make improvements, but had failed to act.
Instead, companies were not building renewable energy generation plants.
The South Island and its source of hydro electricity was a victim of that and also the restrictions of the RMA.
"Government policy is not on their side."
A National-lead government would introduce to the RMA a category called priority consent, where projects of national importance could be given priority.
"It is utterly absurd when you know something is going to be for the good of the nation that you have to go through this extra process," Mr Brownlee said.
