Failure to heed its own warning alarms resulted in a massive spill into the Waikato River, and landed Contact Energy with a $162,500 fine.
The company was prosecuted by the Waikato Regional Council and convicted under the Resource Management Act with unlawfully discharging a contaminant onto land in circumstances that may have resulted in the contaminant entering water.
In his sentencing decision, released today, Chief Environment Court Judge David Kirkpatrick said Contact staff and shut down pumps for maintenance on February 13, 2019, which allowed pressure to develop at a wellhead and closed a non-return valve.
About 44,000 tonnes of fluid flowed over six days into a soakage pond not been built for the high volume. Automatic switches that would have turned off the pumps when the flow was detected had not been installed. The system relied instead on control room staff noticing alarms and acting accordingly.
Between February 13 and February 16, 11 alarms were sent to the control room and acknowledged, but no further steps were taken.
On February 19, the pond's wall and bank collapsed, sending 15,000 cubic metres of soil laden with geothermal fluid across nearby farmland over a gully and into the Waipouwerawera Stream, also collapsing part of the gully wall of the stream.
The soil and fluid then travelled along the stream for nearly 1km and into the Waikato River, turning the river and the Huka Falls dark brown for around 13km before it began to clear. The discolouration of the river lasted for around two days.The sediment from the discharge primarily settled in Lake Ohakuri.
Ngāti Tūwharetoa, the iwi with legal ownership and mana whenua over that portion of the river, said the spill caused great physical and cultural damage and affected its ability as kaitiaki to safeguard the spiritual wellbeing of its taonga.
Taupō District Council had to shut off its municipal water intake at its Centennial treatment plant.
Contact apologised to the Tūwharetoa Māori Trust Board and Nga Kaiahutu o te Awa o Waikato for the spill and the damage caused and has since been working through a restorative justice process with Tūwharetoa and the Waikato Regional Council.
Contact Energy made extensive repairs to the pond, farmland, stream flow and stream culverts.
Judge Kirkpatrick said Contact staff lacked understanding about what the alarms meant as they had gone off previously during pump restarts and were seen as normal system behaviour. The alarms did not present as being urgent, and no clear procedures were in place to follow when the alarms were activated.
Contact said a conviction and discharge or a fine with substantial discount would be appropriate, but the judge said although the company's actions after the spill were responsible and commendable, its failure to respond to its own alarm system meant that the gravity of the offending and its culpability were "very high".
The judge took $250,000 as a starting point for a fine and gave a discount for Contact's prompt guilty plea, noted there were no material aggravating factors and no previous convictions for similar offending, and also took into account Contact's remorse, its acceptance of responsibility and provisions for the interests of victims, in this case Ngāti Tūwharetoa as kaitiaki of the river and the district council.
Ngāti Tūwharetoa had asked that the fine be directed towards the river and its kaitiaki, but Judge Kirkpatrick said he could not tell the regional council, which will get 90 per cent of the fine, to do so. However, he recorded their wish, which was consistent with the regional council's role of protecting the wellbeing of the region's waters.
Contact is New Zealand's second-largest electricity generator and operates four geothermal power stations on the greater Wairakei geothermal field near Taupō.