IN THE MATTER of the Resource Management Act 1991 BETWEEN

Transcription

1 BEFORE THE ENVIRONMENT COURT Decision No. [2017] NZEnvC 141 IN THE MATTER of the Resource Management Act 1991 AND BETWEEN AND of an appeal under s 120 of the Act NEW ZEALAND ENERGY LIMITED (ENV-2014-WLG ) Appellant NGATIRANGITRUST (ENV-2014-WLG ) Appellant AND MANAWATU-WANGANUI COUNCIL Respondent REGIONAL Court: Hearing: Appearances: Environment Judge B P Dwyer Environment Commissioner I M Buchanan Environment Commissioner R Howie 8-10 December 2015 at Levin G P Malone for New Zealand Energy Limited N Jessen for Manawatu-Wanganui Regional Council J P Ferguson and M M E Wikaira for Ngati Rangi Trust G Maclean for Taranaki Fish and Game Council (s 274 party) N M McAdie for Ruapehu District Council (s 274 party) Date of Decision: 4 September 2017 Date of Issue: 4 September 2017 EW ZEALAND ENERGY LTD V MANAWATU-WANGANUI REGIONAL COUNCIL

2 2 DECISION OF THE ENVIRONMENT COURT A: Consents , , and are confirmed, subject to revised conditions. B: Variations to Consents /1,101090/1,101091, and are confirmed, subject to revised conditions. C: New consents , and are confirmed, subject to revised conditions. REASONS Introduction [1] This decision arises from the quashing of the interim decision of this Court 1 following appeal to the High Court by Ngati Rangi Trust. 2 We are directed to reconsider our earlier decision in the light of the judgment of Collins J in the High Court. [2] The appeal relates to various consents and consent variations granted by Manawatu-Wanganui Regional Council (the Council) in 2014 for the ongoing operation of New Zealand Energy Limited's (NZEL) Raetihi Hydro-Electric Power Scheme (the Scheme). These consents and variations were appealed by NZEL and Ngati Rangi Trust. The Court granted replacement consents for the Scheme on a "Iike-for-Iike" basis with no change to conditions relating to residual minimum flows, rates of take and maximum takes from the subject streams as those applying to the existing consents, granted in [3] The interim decision describes the Scheme as currently operated, together with its consent history and the statutory framework applying. 3 We do not repeat this here. 2 3 New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59. Ngati Rangi Trust v Manawatu-Wanganui Regional Council [2016] NZHC Interim decision at [1] to [16].

3 3 [4] The interim decision was quashed by the judgment of Collins J in the High Court under the first ground of appeal (Judgment [1]) that the Environment Court failed to consider all relevant scenarios described in the evidence before it. Collins J also found that: [2] The Court erred in law in considering the renewal of the current consents as controlled activities. [3] Replacement of consents on a like-for-like basis was outside the scope of the Court's jurisdiction. [4] The Court erred in law in considering the environment against which possible effects were to be assessed as including the existing consented activities contrary to the approach taken by the Environment Court in Port Gore Marine Farms Limited v Mar/borough District Council. 4 [5] The Court erred in considering that policies in the One Plan were determinative of controlled activities. [6] The Court erred in law by failing to give the requisite consideration to the matters reserved for controlled activities in Rule 16-7 of the One Plan. [7] The Court failed to consider the appeal by the Trust against the variation of discharge permit relating to the Orautoha Stream. [5] Judgments [2], [3], [5] and [6] above relate to this Court's decision to renew the consents under like-for-like conditions. Collins J found that consideration of this option was outside the Court's jurisdiction (Judgement [3] above). Errors of law related to the Court's consideration of renewal of existing consents as controlled activities (Judgements [2], [5], [6] above) are inextricably linked to the finding on jurisdiction. [6] We give no further consideration to replacement consents on a like-for-like basis in this decision nor to the associated findings of Collins J as this option is clearly not available to us. The focus of this decision is on consideration of all of the relevant scenarios (Judgment [1]) within the existing environment of the streams in their natural state; that is, without the current takes in operation (Judgment [4]). We also deal with the variations to the discharge permit related to the Orautoha Stream (Judgment [7]). In doing so, we adopt and rely on the findings of fact set out in the interim decision and not subject to the High Court appeal. For the sake of efficiency we do not repeat these in full here. Port Gore Marine Farms Ltd v Mar/borough District Council [2012] NZEnvC 72.

4 4 The Scenarios [7] The interim decision described eight scenarios for which evidence was adduced during the course of the original hearing. These scenarios are: S1 NZEL preferred. Flow sharing for the Makotuku and Makara of 75:25 (75% of available flow abstracted, 25% left instream) when the flow is between 300 litres per second and 600 litres per second and 250 litres per second to 500 litres per second respectively. Maximum take from the Makaraiti 300 litres per second and Mangaone tributary no limit. Minimum flow Makotuku split 82 litres per second, October to April and 94 litres per second May to September. Makara minimum flow 70 litres per second, Makaraiti and Mangaone tributary minimum flow 5 litres per second. S2 Existing consented take limits with minimum flow set as for S1. S3 Existing consented take limits, minimum flows as for S1, but the split for Makotuku to change to 82 litres per second, December to April and 94 litres per second May to November. S4 One Plan limits. Existing consented take, plus supplementary take as provided for in the One Plan. Minimum flow of 95 litres per second year round Makotuku, and 77 litres per second Makara. S5 NZEL's second option. Existing consented take, no combined cap, minimum flows as set out for S1 and supplementary take as provided by the One Plan. S6 Flow sharing option introduced by the Court. Takes and minimum flows as for S1, but for flow sharing of 75: 25 to apply at all times above the minimum residual flow for the Makotuku and Makara. S7 Introduced by Ngati Rangi. Maximum takes as consented, minimum flows as for S4, combined cap and flow sharing of 50:50 to apply at all times above minimum residual flow. S8 As for S7 but with flow sharing of 75:25. [8] Scenarios S1 to S5 were developed in caucusing of hydrology and ecology experts and described in the joint witness statement 5 (JWS). All of the scenarios include the allocation of water from the various streams for hydroelectricity generation and all include an increased minimum residual flow requirement from that applying to the existing consents. The two key differences between the scenarios are: 1. A combined cap of 450 litres per second for abstraction of water from the Makotuku and the Makara remains in place (S2, S3, S4), or is removed (S1, S5) Record of Conferencing on Water Quality, Water Quantity and Ecology, dated 8 July 2015.

5 5 2. Additional allocation above the core allocation available is either by flow sharing (S1) or by One Plan sanctioned supplementary allocation (S4 and S5) up to a maximum take of 600 litres per second Makotuku and 500 litres per second Makara. [9] S6 moved away from the core hydroelectricity allocation to provide for flow sharing above the minimum flow up to a maximum take of 600 litres per second and 500 litres per second for the Makotuku and Makara respectively. S7 and S8 retain the core hydroelectricity allocation, but introduce flow sharing of 50:50 (S7) and 75:25 (S8) above the minimum flows. Effects [10] The relevant experts agreed that those scenarios retaining the core hydroelectricity allocation all involve similar and significant hydrological modification of the Makotuku and Makara Streams. Further modification would result from increasing the water taken from the Makara by removal of the combined cap established within the core hydroelectricity allocation. The extent of these modifications was set out by Ms M Watson, hydrologist for Ngati Rangi,6 [11] The experts agreed that the proposed minimum flows would provide mitigation for the adverse effects of taking water from the streams during periods of low flow. They disagreed on two matters in relation to the appropriate level of these flows. [12] Firstly, in relation to the Makotuku, Mr I Jowett, hydrologist and freshwater biologist for NZEL, contended that the critical period for trout spawning and rearing was limited to the months of May to September and that a higher minimum flow of 94 litres per second should only apply to that period. Dr 0 Ausseil, freshwater scientist for Ngati Rangi, and Mr L Brown, freshwater scientist for the Council, suggested this be extended to include October and November to provide mitigation for the effects of low flows over the full period of trout spawning and rearing. [13] Secondly, in relation to the Makara, Mr Jowett supported a minimum flow that retained 60 per cent of the habitat available at Mean Annual Low Flow (MAL F) which equated to a flow of 70 litres per second. He maintained that this lower minimum flow M Watson EIC Appendix 5 modified to include Scenario 6, 7 and 8.

6 6 was justified by the much lower ecological values attributed to the Makara compared with the Makotuku and that the differences in habitat retention would not be discernible between minimum flows of 70 litres per second or 77 litres per second. Dr Ausseil and Mr Brown maintained that the retention of 70 per cent of habitat (77 litres per second) would provide the appropriate level of mitigation of effects on fish habitat. We come back to these disputed minimum flows later. [14] The experts also differed in their assessment of the adverse ecological effects of continuing to abstract the core hydroelectricity allocation, albeit with a higher minimum residual flow requirement. These effects are described in some detail in the interim decision? and reflect the effects of the currently operating scheme assessed against a stream environment without the scheme in place. We concluded that, while there are adverse effects on the ecology of the principal subject streams, the available evidence indicated that a healthy instream biota continued to be maintained below the intake on the Makotuku and that catchment condition was the major influence on the ecology of the Makara above and below the intake. [15] Scenarios 1 to 5 all incorporate the core allocation for hydroelectricity. The effects of these scenarios at the level of base take, mitigated to some extent by proposed higher minimum flows, remain as for the scheme as currently operated when assessed against the existing environment excluding the scheme. It remains to assess the effects of the scenarios where they differ, namely with the removal of the combined cap (S1, S5) and supplementary takes (S4, S5). Combined cap [16] Abstraction of the core hydroelectricity allocation above the minimum residual flow would result in extended periods of stable flow compared to natural flow fluctuations from small rainfall events. This is referred to as "flatlining". Mr Jowett 8 calculated the times that flows would be at or less than the revised minimum flows for each scenario. For the Makotuku, he found small differences between scenarios 1 to 5, but in his opinion these differences were not ecologically meaningful. For the Makara Stream, he found that the potential duration of low flows increased for S1 and S5 (removal of the combined cap) to an extent that suggested the potential for these scenarios to increase algal accumulation in dry years. Overall Mr Jowett's view was 7 New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [57] to [71]. I Jowett rebuttal, paras 45 to 47.

7 7 that periphyton in the streams could only be expected to reach nuisance levels every year or so with all scenarios. [17] In contrast, Dr Ausseil and Mr Brown contended that nuisance levels of periphyton were regularly present with the existing scheme in place based on their observation of stream conditions at Raetihi and above the scheme intakes. It was their opinion that removal of the combined cap intake from the two streams contemplated by S1 and S5 would increase flatlining in the Makara resulting in increased periphyton accumulation of the stream. [18] Scenarios 6 to 8 provide mitigation of the adverse effects of flatlining in that the flow sharing proposed mirrors the natural fluctuations in stream flow, significantly reducing the amount of time flows are below MALF. The effects of S6 are described in the interim decision 9, concluding with acceptance of the relevant experts' advice that it provided significant opportunity to mitigate the downstream effects of water takes from the Makotuku and Makara Streams. S7 and S8 extend this mitigation by limiting the maximum takes to the core hydroelectricity allocation. Additional Allocation [19] The core hydroelectricity allocation in the One Plan is that authorised by the 2003 consents. For the Makotuku and Makara, this is limited to a rate of take of 300 litres per second, but with a combined cap of 450 litres per second from the two streams. S1 proposes removal of the combined cap and the further allocation on a 75:25 flow share basis above the core hydroelectricity allocation to a maximum 600 litres per second Makotuku and 500 litres per second Makara. Ms Watson 10 described this. scenario as resulting in a flow regime that deviates the most of any proposal from the streams' natural character. [20] S4 and S5 provide for supplementary allocation of water as provided for in the One Plan. The difference in the scenarios is that S5 removes the combined cap on takes from the Makotuku and Makara resulting in more water able to be taken at below median flows from the Makara. The adverse effects of removing the combined cap have been noted earlier New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [76] to [78]. Watson EIC at para 119.

8 8 [21] Some confusion arose during the hearing as to the level of flow above the intakes required to trigger the availability of the supplementary allocation of 10 per cent of the natural flow of the stream provided for in the One Plan. The joint witness statement defined supplementary take as "available at flows above median flow"ll. This appears to have been applied to the mean take of water calculated for Table 1 in this joint statement. Ms Watson however, in both her original hydrological modelling 12 and revised modelling,13 has calculated S4 and S5 flow outputs and statistics under conditions where the supplementary take does not reduce residual flow below the above intake median. The differing approaches result in quite different trigger points for supplementary take. [22] NZEL's position was that the trigger was set at 1.1 times the median flow above which ten per cent of the actual flow can be taken. For the Makotuku (using 420 litres per second as median) this is 480 litres per second and for the Makara it is 374 litres per second (using 340 litres per second as median). [23] The Council and Ngati Rangi's position was that the requirement to maintain residual median flow applied, resulting in a trigger for the Makotuku of 720 litres per second (core allocation plus median flow) and for the Makara of 540 litres per second. [24] The experts agreed that the supplementary take would have less than minor additional effects beyond that already occurring under the core hydroelectricity allocation described earlier. 14 We assume this was related to the trigger definition adopted in the joint witness statement. That being the case, the higher trigger flow level adopted by the Council and Ngati Rangi and reflected in the draft conditions would also result in less than minor additional adverse effects. One Plan Provisions [25] The interim decision considered the issue of security of supply of water for existing hydroelectricity generation provided by Objective 5-3(a)(ii) and Policies 5-14 and 5-15 in the One Plan 15. We adopt this evaluation and the finding that NZEL could JWS at para [15]IV. Watson EIC Appendix B, Table 6. Watson EIC, New Appendix F, Table 9. JWS Table 1, page 11. New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [33] to [42].

9 9 reasonably expect that its current operating takes and flow regimes were secure. This did not form part of the High Court Appeal. [26] The interim decision also evaluated the One Plan policy framework for surface water allocation, finding that maintaining the integrity of the One Plan in managing the region's water resources weighed heavily in this case 16. Alternative scenarios that did not conform to these directive policies could not be favoured over those that did, even if they delivered significant mitigation of the adverse effects of the proposed takes. We adopt this finding. [27] NZEL sought the allocation of additional water for hydroelectricity generation above the core allocation provided in the One Plan, in part as a trade-off for agreement to increase the minimum residual flows in the streams. Mr Jessen submitted that the Council had long supported a supplementary allocation.to NZEL under the parameters of Policy 5-17 One Plan. This opportunity was also recognised as available to the Court by Ngati Rangi Trust. 17 [28] Of the scenarios addressed in evidence only S4 is consistent with the provisions of Policy 5-17 of the One Plan, allowing consideration of supplementary allocations above core allocations set out in the Plan. planners 18 and we have accepted that advice. This was acknowledged by the expert [29] It should be noted here that S7 and S8 have the effect of reducing the rate of take from the streams to 50 percent or 75 percent respectively of the available flow above minimum. This would result in a reduction of NZEL's existing take regime. 19 As noted earlier, the One Plan provides security of supply for existing generators. In particular, Policy 5-14(b) protects "any takes and flow regimes" which allows not only for the protection of the base allocation, but also for the amount of water available for generation. S7 and S8 do not achieve this. [30] Policy 5-17(b)(ii) One Plan directs, among other things, that the magnitude of median flows not be Significantly departed from when exercising any supplementary allocation. As noted earlier, there was some confusion between the experts on this New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [91]. Ngati Rangi Trust opening at para 15(b). Planning JWS at para 14. Watson EIC Appendix 5, Table 9.

10 10 trigger point for additional water to be available. The policy is quite clear in this regard; supplementary allocation cannot be exercised until the natural flow in the streams is above the combined total of the median flow, plus the core hydroelectricity allocation. We have noted these trigger flows for the Makotuku and Makara earlier. [31] Regarding minimum flows, Schedule C One Plan establishes these for the Makotuku and Makara as that flow which retains 70 per cent of the instream habitat provided by mean annual low flows. For the Makotuku, this minimum flow is 95 litres per second year round and for the Makara it is 77 litres per second year round. As noted earlier, the experts agreed that from an effects based perspective minimum flows in the Makotuku could vary between summer/autumn and winter/spring. Mr Jowett also contended that the appropriate level of habitat protection for the Makara was 60 percent of MALF (minimum flow 70 litres per second). [32] We have accepted the submissions of Mr Jessen and Mr Ferguson that the strength of the One Plan allocation framework is such that it must weigh heavily in our s 104 assessment in this case. We find that the appropriate minimum residual flows to apply to the consents to take water from the Makotuku and Makara is 95 litres per second and 77 litres per second respectively year round. [33] We also find that any increase in allocation of water from these streams above the core hydroelectricity allocation established by the consents granted in 2003 and confirmed in the One Plan is to be consistent with the full provisions of Policy [34] Applications and for water permits to take water from the Makotuku and Makara respectively for hydroelectricity generation are granted subject to conditions that maintain the rates of take, maximum takes and combined cap on take provided in the consents granted in Minimum flows for each of the streams is to be in accordance with Schedule C One Plan. A supplementary allocation of water from the Makotuku is to be available to NZEL up to a maximum take of 600 litres per second and consistent with the provisions of Policy 5-17 One Plan. For the Makara, the maximum allowable take is 500 litres per second.

11 11 Conditions [35] The Council presented a draft set of Consent Conditions 20 for the replacement land use and water permits for the Makotuku and Makara streams consistent with the parameters of 84. We consider these Conditions to be appropriate, with the exception of the requirement for a financial contribution from NZEL, set out in proposed condition 43 for the Makotuku consents. The Council is directed to prepare a final set of Consent Conditions for all consents and variations to consents subject to this decision for approval. [36] The inclusion of a financial contribution was specifically removed from proposed conditions in the interim decision. This was not included in the High Court appeal. For clarity we expand the reasons for not including this provision in the Conditions. [37] The Council and Ngati Rangi proposed the imposition of a financial contribution to be applied to stock exclusion and riparian planting of the Makotuku below the scheme intake. This was broadly costed by Mr Brown for the Council at around $900,000 over the proposed duration of the Consent. [38] Mr Brown noted the potential benefits of riparian planting, and these were accepted by Mr Jowett as contributing to stream improvements, but only as part of a long term strategy. Mr Jowett cast considerable doubt on the efficacy of riparian planting in delivering any short term mitigation for the effects of taking water from the stream. Ms H Marr, planning consultant for Ngati Rangi, acknowledged that the adverse effects on stream flows resulting from the scheme would not be mitigated by riparian planting, but that other aspects of natural character would be improved that may off-set the adverse hydrological effects. [39] Taking into account the mitigation likely from the increase in minimum flow and the evidence on the level of adverse effects, together with the uncertainty of achieving anticipated outcomes from the scale of riparian planting proposed and the level of financial contribution required, we agree with the submission of Mr Malone that a financial contribution in this instance is unjustified and unreasonable. 20 MWRC Table of Proposed Conditions. Land Use Consent and Water Permit ' Land Use Consent and Water Permit Tab 1. Planning Bundle. '

12 12 Orautoha Stream. Variation to Discharge Permit /1 [40] Collins J21 found that the Environment Court had failed to consider Ngati Rangi Trust's appeal against the commissioners' decision to vary Discharge Permit /1 on the basis that "appropriate monitoring recognises the intrinsic values of the Orautoha Stream, and a turbidity limit that provides a yardstick against which adverse effects on the water quality of the Orautoha Stream can be measured are required.,,22 We acknowledge our oversight of this point of appeal. [41] Dr Ausseil addressed this discharge in evidence, noting a number of potential effects that could occur but concluding that he could not confidently comment on the likely actual effects on water clarity from the information available. He supported establishment of a monitoring regime consistent with that recommended in the technical JWS at Attachment 6. [42] Mr Beale, environmental scientist and planning consultant for NZEL, considered that turbidity monitoring of the Orautoha Stream above and below the discharge from the powerhouse was more appropriate than monitoring turbidity at the head pond. He put forward replacement conditions setting out turbidity standards for the discharge and monitoring requirements. 23 [43] In considering this discharge the technical experts recorded that their understanding was that NZEL was not pursuing the removal of Condition 4 of the Discharge Permit, noting that discharge of water from the powerhouse that did not exceed turbidity in the Orautoha Stream upstream of the discharge point would have minimal effect. Requirements for monitoring of the discharge and the stream were proposed in Attachment 6 to the technical JWS. [44] The Council translated the turbidity standards and monitoring requirements proposed by the relevant technical experts into a set of additional conditions for the Discharge Permit. 24 These proposed conditions were not contested and we accept them as appropriate. They meet the relief sought by Ngati Rangi and are not contrary to the National Conservation Order for the Manganui-o-te-au River of which the Orautoha Stream is a tributary. Ngati Rangi Trust v Manawatu-Wanganui Regional Council [2016] NZHC 2948 at [75]. Ngati Rangi Trust Notice of Appeal, 34 February 2014 at 8.10(b). Simon Beale EIC Appendix 1. MWRC Table of Proposed Conditions. Discharge Permit /1 Tab 1. Planning Bundle.

13 13 [45] Variations to Discharge Permit are granted as set out in the Council's proposed conditions. 25 Other Variations [46] Applications for variations to Land Use Consent and to Water Permits and101991/1 sought changes to the water takes for hydroelectricity generation from the Makaraiti stream and an un-named tributary of the Mangaone Stream. These takes from the lesser streams form part of the overall core allocation for the scheme. The variations sought by NZEL involve changes to this core allocation. [47] For the reasons set out we have declined any increase in allocations from the Makotuku and Makara streams that is outside the core hydroelectricity allocation and does not comply with the provisions in the One Plan for supplementary allocation. These same principles apply to the applications for increased takes from the lesser streams and we decline the applications sought by NZEL to increase these takes. No supplementary allocation under One Plan rules has been suggested by any party as being an option. [48] Variations to Land Use Consent /1 and Water Permits /1 and /1 are granted subject to conditions proposed by the Council. 26 [49] Variation to Land Use Consent to maintain the canals and dredge the settling pond is confirmed, subject to conditions proposed by the Council. 27 New Consents [50] The interim decision 28 findings on applications for Discharge Permits , and were not the subject of appeal to the High Court. We adopt those findings and the new consents are granted subject to conditions as proposed by the Council MWRC Table of Proposed Conditions. Discharge Permit /1 Tab 1. Planning Bundle. 26 MWRC Table of Proposed Conditions. Variation to Land Use Consent /1 and Water Permit /1; Water Permit /1. Tab 1. Planning Bundle. 27 MWRC Table of Proposed Conditions. Tab 1. Planning Bundle. Variation to Land Use Consent /1. 28 New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [105]. MWRC Table of Proposed Conditions. Discharge Permits , and Tab 1. lanning Bundle.

14 14 Duration of consents [51] We adopt the findings in the interim decision. 3D These findings were not appealed to the High Court. The expiry date for all new consents granted for the scheme is confirmed as 20 December Costs [52] This was a complex matter requiring the resolution of difficult and contestable questions of fact and law. Under the circumstances our tentative view is that costs should lie where they fall. If any party has a contrary view and wishes to make a costs application, any such application should be made and responded to in accordance with the Environment Court Practice Note Authorship [53] Commissioner Buchanan was the primary author of this decision which reflects the unanimous views of the Court. B P Dwyer Environment Judge 30 New Zealand Energy Ltd v Manawatu-Wanganui Regional Council [2016] NZEnvC 59 at [95] to [97].