He said Trustpower's hydro plants deliver the same 100 percent renewable, zero-carbon electricity that the NPS is attempting to protect – as part of the country's climate change efforts - but they will not enjoy the same protection the firm's rivals get.
"The final form of this NPS is not yet set," Ridley-Smith said in notes for the firm's annual shareholder meeting.
"We are lobbying the Ministry for the Environment to remove this arbitrary distinction and recognise, without favour, the contribution that all hydro generators make to a low-carbon future. We hope to avoid having to challenge it in the courts."
Major issue
Resource consents are a major issue for the power industry. Not only are they costly and time-consuming to gain for new generation development, but re-consenting projects already in place for decades can cost millions of dollars and has opened some firms to legal challenges by iwi and environmental groups.
Being able to amend existing consents, particularly to better capture flood and seasonal flows, is also of growing importance for firms wanting to increase production by upgrading older turbines and generators.
The legal challenge Trustpower has signalled would not be its first. Previous challenges have included action against Inland Revenue on the tax treatment of development costs of projects that were not proceeded with, and to the process the Electricity Authority previously ran on transmission and distributed generation pricing principles. Earlier this month it kicked off a court challenge against the authority's final ruling on transmission pricing.
Ridley-Smith told shareholders the planned closure of the Tiwai Point aluminium smelter – the country's biggest electricity user - is happening faster than it had thought.
The greatest impact on the company will be from lower power prices its 80-megawatt Waipori hydro scheme near Dunedin will receive. The electricity it is contracted to buy from Tilt Renewables' Mahinerangi wind farm will also be higher than spot prices for some years but will average out over time.
Ridley-Smith said the smelter closure should help speed the closure of some older gas and coal-fired generation and reduce the country's emissions. But he said it is still important that some gas-fired generation remains available to help cover the inherent volatility of wind, hydro and solar power.
"Only if we know that thermal generation is available to provide resilience and back up will we and others commit to building more new renewable generation," he said.
"Recent changes to the Resource Management Act, that will make it harder to consent thermal generation, are not helpful and may work against decarbonisation."