Decision on river rocks power firms

By ANNE GIBSON

An Environment Court decision against Genesis Power could stop infrastructure investment and spell disaster for New Zealand's economic growth prospects, say energy experts.

The court ruled that Genesis could divert water from the Whanganui River for hydro-electric power generation for only 10 years instead of the 35 years it wanted.

The decision overturned a resource consent granted by the Manawatu-Wanganui Regional Council, and gave victory to Whanganui River Maori.

Major Electricity Users Group executive director Ralph Matthes, said the Environment Court decision could be disastrous for economic growth.

"What do we do to meet increasing electricity growth which underpins strong gross domestic product growth?" he asked.

The decision would curtail investment and sent the wrong signals to electricity generators.

Energy consultant Owen McShane said the decision was one of the most stupid given under the RMA, but this was not the court's fault, as the act needed urgent reform.

"The idea that you can run an energy-generating industry when your fuel supply is limited to 10 years is just ludicrous," he said.

"Imagine if we were talking about a decision which said we will only supply you with oil or gas for the next decade. The result would be that nobody would invest in that sector."

But McShane said there was some hope because a Resource Management Act review now being done had singled out this area as one to be addressed.

He cited the Ministry for the Environment's discussion paper, which targeted water use rights for a change under proposed RMA reform.

Genesis spokeswoman Donna Baker said the power scheme which was the subject of the Whanganui appeal generated about 4 per cent of the national electricity supply.

Executives were still reading the decision, and had not yet decided how to respond or whether an appeal would be lodged, she said.

"Obviously Genesis is disappointed at the term of 10 years, but the company will now take time to review the 135-page report and assess the implications," she said. "Our reading of the decision is that the Environment Court believes this will allow the parties to consider the tangata whenua issues raised by appellants."

Mighty River Power's external affairs general manager Neil Williams said legal people and internal resource executives at his firm were also reading the decision.

Mighty River was this year granted a 35-year extension on Waikato River water rights, he said, although the company was still in discussion with parties who objected, including territorial authorities, commercial and recreational organisations.

Mighty River had worked on this application for many years, including in its former guise as the Electricity Corporation of New Zealand, he said.

"Mighty River has very good relationships with Tuwharetoa, Tainui and Raukawa and other iwi," he said.

Contact Energy was given resource consent late last year to continue using water in the Clutha River for 35 years, but complained at the time that the process had been extremely long, difficult and expensive.

Contact's general manager of operations, David Thomas, said in September that the consent process had started in 1998 and had cost Contact $5 million.

Generation stations on the Clutha deliver about 10 per cent of the national electricity needs, and Thomas said he was pleased that the resource consent process had ended.

What happened in court

* Maori appealed about the diversion of water from the headwaters of the Whangaehu, Whanganui and Moawhango Rivers into Lake Taupo and then into the Waikato River.

* They said such diversions were "culturally unacceptable".

* The court sat at Taupo, Ohakune, Tirorangi Marae, Taumarunui and Wellington.

* It heard of long-standing grievances made known for many years.

* It reduced Genesis Power's resource consent to use the water from 35 years to 10 years.