Water plan u-turn welcomed

A u-turn by the body set up to apportion the waters of the Waitaki has received a cautious welcome from Meridian Energy, which generates about a quarter of the country's electricity from the river.

The draft plan released in February by the Waitaki Catchment Water Allocation Board almost doubled the minimum amount Meridian had to send down the river, reducing its ability to store water for times when demand for electricity was greater.

The Electricity Commission estimated that the extra thermal generation required would cost about $30 million a year.

The Waitaki system represents about 60 per cent of national hydro storage.

The draft plan would also have reduced the extent to which Meridian could lower the levels of the hydro storage lakes, especially Lake Tekapo, further reducing its effective storage capacity.

But the final plan released yesterday maintains the minimum levels in Meridian's existing consents and has set the minimum flow at 150 cubic metres a second, which is well below the 230 cumecs in the draft plan, though higher than the 120 cumecs in Meridian's existing consents.

"It's a relief from a security of supply perspective," said Meridian chief executive Keith Turner.

"If we had had the draft regime it would have reduced output from the Waitaki and that would have put upward pressure on prices.

"It's a pragmatic decision."

But the company is still considering the implications of the 150 cumecs minimum.

"Our existing consent of 120 cumecs often means 80 cumecs at the river mouth. If the plan requires 150 cumecs at the mouth that would be a significant uplift."

That question is expected to be resolved by a review of the plan by Environment Canterbury, which now has to implement it.

Ministry of the Environment chief executive Barry Carbon said the final plan changed the requirements on Meridian for dealing with dry years.

"They are not being asked to release more water in dry years than was coming in."

The final plan leaves open the possibility of further hydro development over a 35km stretch downstream of the Waitaki dam.

Carbon said the availability of water for irrigators had also been clarified. Irrigators were concerned that water would not be available for them for much of the time.

"All existing irrigators get 100 per cent security and future applicants with viable irrigation schemes are looking at something like 95 per cent security."

Aoraki Development Trust chief executive Murray Cleverly was pleasantly surprised by the more balanced approach of the final plan.

It was a much better allocation for irrigation, which had boosted dairy production and wage levels in South Canterbury, he said.

The board was established by special legislation last year to draw up a regime to manage the river in the face of competing claims on it.

Unless the plan is appealed against - on points of law only - within three weeks the board will now go out of existence.

The draft plan drew nearly 1200 submissions. Meridian's concerns about the impact on effective generating capacity and security of supply were broadly shared by other generators, the commission and endorsed by an independent report by the Institute of Economic Research commissioned by the Major Electricity Users Group, Business New Zealand and Business Roundtable.