AND STATEMENT OF EVIDENCE OF RICHARD JOHN MATTHEWS

Transcription

1 IN THE MATTER of the Resource Management Act 1991 AND IN THE MATTER of the submissions and further submissions by Genesis Energy Limited on the Proposed Plan Change 3 to the Waitaki Catchment Water Allocation Regional Plan STATEMENT OF EVIDENCE OF RICHARD JOHN MATTHEWS

2 CONTENTS 1. INTRODUCTION 1 Page 2. BACKGROUND TO SUBMISSION 2 3. RMA FRAMEWORK 3 Part 2 of the RMA 4 National Policy Statement on Renewable Generation 7 Canterbury Regional Policy Statement 9 4. SUBMISSION MADE BY GENESIS ENERGY ON PC3 11 Introduction 11 Controlled Activity Status for Existing Hydroelectricity 13 Supporting Policy Framework for New Rule 15A 18 Matters of Discretion / Control 18 5 CONCLUSION APPENDIX 1: Section 32 Evaluation of Controlled Activity for Hydro-electricity Generation

3 1. INTRODUCTION Page 1 of 20 Qualifications and Experience 1.1 I hold a Master of Science (Hons) degree, and have been working as a resource management adviser for more than thirty years, initially in the local government sector and since 1999 in private practice with the environmental consulting practice, Mitchell Partnerships Limited. I am a partner in this practice. 1.2 My specialist area of expertise is in the application of the Resource Management Act 1991 ( RMA or the Act ), and other relevant environmental management legislation, the development of Regional and District Plans and the acquisition and assessment of resource consent applications. 1.3 In relation to statutory planning, I have been involved in the preparation and audit of plans and policy statements since the passing of the RMA. This has involved detailed analyses of plan provisions, assisting Councils to prepare planning documentation, preparation of submissions, presentation of evidence at hearings, and provision of advice regarding the lodging and resolution of Environment Court references. I have participated in several Council hearings relating to policy and plan development, and have attended a number court-assisted and council initiated mediation sessions. 1.4 I have been asked to present evidence to this hearing in relation to the Genesis Energy Limited 1 ( Genesis Energy ) submissions and further submissions in respect of the Proposed Plan Change 3 ( PC3 ) to the Waitaki Catchment Water Allocation Regional Plan ( Waitaki Plan ). Scope of Evidence 1.5 In my evidence I will: Discuss the overall RMA framework within which the specific Genesis Energy submissions should be considered; 1 Genesis Power Limited changed its name to Genesis Energy Limited in September In terms of s2a of the RMA, Genesis Energy Limited is essentially the same as and is a successor to Genesis Power Limited.

4 Page 2 of 20 Introduce the matters covered by the Genesis Energy submissions on PC3; Discuss the matters Genesis Energy has raised in its submissions relating to PC3, and make comment on how they are addressed in the Section 42A report 2 recommendations; and Conclude my evidence. 1.6 I confirm that I have read the Code of Conduct for expert witnesses contained in the Environment Court Practice Note and that I agree to comply with it. I confirm that I have considered all the material facts that I am aware of that might alter or detract from the opinions I express. 2. BACKGROUND TO SUBMISSION 2.1 Genesis Energy is an electricity generator and energy retailer with approximately 1648 MW of installed generation capacity and more than half a million retail customers. Genesis Energy owns and operates the Tekapo Power Scheme in the upper Waitaki Valley. 2.2 The Tekapo Power Scheme sits at the head of the Waitaki Valley and comprises the Tekapo A (25MW) and Tekapo B (160MW) power stations, Lake Tekapo and its associated inflows, and the Tekapo Canal. The Tekapo Power Scheme generates approximately 980GWh per annum of renewable electricity (equivalent to the amount of electricity used annually by some 120,000 households). In generating this electricity the Tekapo Power Scheme makes an important contribution to New Zealand s security of electricity supply, particularly in the South Island and in Canterbury which are dependent on hydro-electricity generation Tekapo Power Scheme has been part of the existing environment of the Waitaki Catchment for many decades, with Tekapo A being commissioned in 1951 and Tekapo B in The continued operation of Tekapo Power Scheme is totally reliant on being able to store water in, and manage lake levels of, Lake Tekapo, and 2 3 Plan Change 3 to the Waitaki Catchment Water Allocation Regional Plan, Section 42A Report, Report No. R15/47, April In addition, most of the water entering Lake Tekapo passes through all eight power stations in the Waitaki Power Scheme meaning, in total, Lake Tekapo inflows contribute approximately 7,680 GWh per annum of renewable electricity to the national grid.

5 Page 3 of 20 on being able to reticulate water from Lake Tekapo through two power stations and the Tekapo Canal. 2.4 The Tekapo Power Scheme operations are authorised by a series of resource consents to take, dam, divert and discharge water which expire in Those resource consents are summarised in the evidence of Jarrod Bowler for Genesis Energy. The key resource consent conditions which affect how much, and how long water can be stored in Lake Tekapo for use in the Tekapo Power Scheme (and therefore in the Waitaki Power Scheme downstream), and hence the ability to generate electricity using those power schemes, include: Specific controls on the management of water levels in Lake Tekapo, including the obligation to minimise as far as practicable any adverse effects on the exercise of rights on the Waitaki Power Scheme. Requirements to release periodic recreational flows into the Tekapo River at specified periods of the year. Restrictions on the rate water can be taken from Lake Tekapo into the Tekapo A Power Station and/or from the Tekapo River into the Tekapo Canal, and on the rate water can be discharged from the Tekapo B Power Station. Specific controls on the management of spill to the Tekapo River. 2.5 The provision of greater certainty for replacement of those resource consents in the Waitaki Plan is of considerable interest to Genesis Energy. Genesis Energy is also interested in PC3 insofar as its other provisions may affect the future operation of the Tekapo Power Scheme. 3. RMA FRAMEWORK 3.1 There are clear statutory requirements in the RMA, and in higher order planning documents to provide for the Waitaki Catchment s existing hydroelectricity generation (including the Tekapo Power Scheme) in the Waitaki Plan. Of particular relevance are:

6 Part 2 of the RMA its purpose and principles; Page 4 of 20 The National Policy Statement on Renewable Electricity Generation ( NPSREG ); and The Canterbury Regional Policy Statement ( RPS ). Part 2 of the RMA 3.2 The purpose of the RMA is set out in Part 2, section 5: 5. Purpose (1) The purpose of this Act is to promote the sustainable management of natural and physical resources. (2) In this Act, sustainable management means managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural wellbeing and for their health and safety while (a) (b) (c) Sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and Safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and Avoiding, remedying, or mitigating any adverse effects of activities on the environment. 3.3 The purpose of the RMA is to be given practical expression through all decision making under the Act, including policies, plans, and resource consents. 3.4 Section 5 requires an overall broad judgment on whether or not a proposal promotes the sustainable management of natural and physical resources. In the context of section 5, the following matters are of particular relevance when considering the electricity generation infrastructure in the Waitaki Catchment: The Waitaki Catchment hydroelectricity generation schemes are nationally significant longstanding physical resources that have been part of the existing environment since first work began on the Waitaki Dam in the 1930s, and they are subject to the principle of sustainable management;

7 Page 5 of 20 The Waitaki Catchment hydroelectricity generation schemes enable people and communities (locally, regionally and nationally) to provide for their social, economic and cultural wellbeing and for their health and safety; The water abstracted by the schemes is used efficiently, and generates electricity within multiple power stations; The Waitaki Catchment hydroelectricity power schemes form a substantial body of renewable electricity generation, contributing, on average, 25% of New Zealand s renewable electricity generation; The Waitaki Catchment hydroelectricity power schemes are of national significance in providing security of supply to New Zealand s electricity network, particularly in the South Island. The Waitaki based schemes alone provide approximately 60% of New Zealand s controllable hydro storage capacity; Electricity is a vital resource for New Zealand. There can be no sustainable management of natural and physical resources without energy, of which electricity is a major component; If the operations of the Waitaki Catchment hydroelectricity power schemes are constrained, including restricting their access to water, it will adversely affect the ability of the schemes to generate electricity; and The Waitaki Catchment hydroelectricity power schemes, including the Tekapo Power Scheme, are subject to a detailed operational regime that robustly addresses their effects on the environment. 3.5 The critical role of electricity in providing for the wellbeing of people and communities has been recognised by the Environment Court, for example: Electricity is a vital resource for New Zealand. There can be no sustainable management of natural and physical resources without energy, of which electricity is a major component. 4 4 Genesis Power Limited v Franklin District Council [2005] NZRMA 541 at [64]

8 Page 6 of 20 From a national level, electricity is an essential commodity to New Zealand households (directly they spend in excess of $2 billion on it) and industry. It provides the basis for our economic prosperity and way of life. Unlike in some other countries, electricity cannot be imported, and for some purposes it has no practical alternatives Similarly, the Environment Court has stated the full utilisation of generation facilities is in the national interest I also note that the William Young in the Court of Appeal decision relating to the Tongariro Power Development, a hydroelectric power scheme that is similarly of national importance, observed that: 7 It is, for instance, inconceivable that the Environment Court considered that the TPD should cease operating at the expiry of its ten-year consent. So the key issue was mitigation. 3.8 In my opinion, it is therefore as important to recognise and provide for electricity generation activities within a planning instrument, such as PC3, as it is to provide for the range of other matters specifically identified in Sections 6, 7 and 8 of the RMA. Sections 6, 7 and 8 of the RMA set out the principles to be applied in achieving the purpose of the Act and state: 6 Matters of National Importance In achieving the purpose of this Act, all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources, shall recognise and provide for the following matters of national importance: (a) (b) (c) (d) (e) (f) (g) The preservation of the natural character of the coastal environment (including the coastal marine area), wetlands, and lakes and rivers and their margins, and the protection of them from inappropriate subdivision, use, and development: The protection of outstanding natural features and landscapes from inappropriate subdivision, use, and development: The protection of areas of significant indigenous vegetation and significant habitats of indigenous fauna: The maintenance and enhancement of public access to and along the coastal marine area, lakes, and rivers: The relationship of Maori and their culture and traditions with their ancestral lands, water, sites, waahi tapu, and other taonga. The protection of historic heritage from inappropriate subdivision, use, and development. The protection of recognised customary activities Rotokawa Joint Venture Ltd and Mighty River Power Ltd v Waikato Regional Council (A41/07) at [422] Ngati Rangi Trust v Manawatu-Wanganui Regional Council (A67/04) at [402] Ngati Rangi Trust v Genesis Power Ltd, Court of Appeal decision CA518/07, 2 June 2009.

9 7. Other Matters Page 7 of 20 In achieving the purpose of this Act, all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources, shall have particular regard to (a) (aa) (b) (ba) (c) (d) (e) (f) (g) (h) (i) (j) Kaitiakitanga: The ethic of stewardship: The efficient use and development of natural and physical resources: the efficiency of the end use of energy: The maintenance and enhancement of amenity values: Intrinsic values of ecosystems: Repealed. Maintenance and enhancement of the quality of the environment: Any finite characteristics of natural and physical resources: The protection of the habitat of trout and salmon: The effects of climate change: The benefits to be derived from the use and development of renewable energy. 8. Treaty of Waitangi In achieving the purpose of this Act, all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources, shall take into account the principles of the Treaty of Waitangi (Te Tiriti o Waitangi). 3.9 The principles contained in sections 6, 7 and 8 are subordinate to the overall purpose of the Act. Each plays a part in the overall consideration of whether the purpose of the Act has been achieved in a particular situation. These matters are not an end in themselves; they are an accessory to the principal purpose. This hierarchy applies to all of the principles set out in sections 6, 7 and 8 of the RMA In the overall framework of Part II, I consider that electricity (and therefore the generation of electricity) is an essential component of enabling people and communities to provide for their social and economic well-being, and for their health and safety. Providing for the use and development of natural resources (and in particular, renewable energy resources) for electricity generation purposes must be given significant weight in policy development. National Policy Statement on Renewable Electricity Generation 3.11 The NPSREG came into effect on 13 May 2011 and identifies the need to develop, upgrade, maintain and operate renewable electricity generation activities throughout New Zealand as a matter of national importance. The overarching objective of the NPSREG states:

10 Page 8 of 20 To recognise the national significance of renewable electricity generation activities by providing for the development, operation, maintenance and upgrading of new and existing renewable electricity generation activities, such that the proportion of New Zealand s electricity generated from renewable energy sources increases to a level that meets or exceeds the New Zealand Government s national target for renewable electricity generation In particular, Policy B of the NPSREG states: Decision-makers shall have particular regard to the following matters: a) maintenance of the generation output of existing renewable electricity generation activities can require protection of the assets, operational capacity and continued availability of the renewable energy resource; and b) even minor reductions in the generation output of existing renewable electricity generation activities can cumulatively have significant adverse effects on national, regional and local renewable electricity generation output; and c) meeting or exceeding the New Zealand Government s national target for the generation of electricity from renewable resources will require the significant development of renewable electricity generation activities This policy clearly points to the maintenance of existing generation output as a key step toward meeting the national target for generation of electricity from renewable sources, and emphasizes that even small reductions in generation output can compromise reaching that national target. It is incumbent on decision makers, including those for PC3, to have particular regard to these matters when making decisions affecting renewable electricity generation resources such as those forming part of the Waitaki and Tekapo Power Schemes Under section 67(3) of the RMA the Waitaki Plan must give effect to the NPSREG. The need to give effect to the NPSREG requires the Waitaki Plan to positively implement the NPSREG. The key matters contained in the NPSREG in respect of the existing hydroelectricity generation facilities in the Waitaki Valley which must be positively implemented by the Waitaki Plan are that the NPSREG: Makes the operation, maintenance and upgrading of existing renewable electricity generation activities and the benefits of that generation matters of national significance; Acknowledges that the maintenance of generation output from existing activities may require the protection of those assets, their operational

11 Page 9 of 20 capacity, and the continued availability of the renewable resource on which they rely; 8 Requires particular regard be had to managing the effects of renewable electricity generation in a manner which allows for the operational requirements of those facilities; 9 and Requires the Waitaki Plan to include objectives, policies and methods to provide for the operation, maintenance and upgrading of existing hydroelectricity generation facilities Positively implementing the NPSREG does not mean the Waitaki Plan needs to reiterate each and every provision in the NPSREG. However, it does require that an appropriate level of protection be afforded to the operation of existing hydroelectricity generation infrastructure in the catchment, including the Tekapo Power Scheme, and that it enables the operation, maintenance, development and upgrading of that infrastructure. The objectives and policies introduced by PC3 must give effect to the NPSREG. Canterbury Regional Policy Statement 3.16 The Waitaki Plan must also give effect to the RPS, as must Plan Change 3 to the Waitaki Plan. In that regard, the RPS includes the following provisions which are of particular relevance when considering the existing hydroelectricity generation infrastructure in the Waitaki Catchment: Policy Regionally significant infrastructure (Wider Region) Methods The Canterbury Regional Council: Will: (1) Set out objectives and policies, and may include methods in regional plans which: (a) provide for regionally significant infrastructure by reducing constraints on their efficient and effective operation, maintenance and upgrade NPSREG, Policy B a) and b). NPSREG Policy C1 NPSREG, Policy E2.

12 (b) (c) Page 10 of 20 avoid development that may impact on regionally significant infrastructure avoid, remedy or mitigate the adverse effects of regionally significant infrastructure on the environment. Policy Existing activities and infrastructure Methods The Canterbury Regional Council: Will: (1) Set out objectives and policies, and may include methods in regional plans (including environmental flow and water allocation regimes) that: (a) (b) Recognise and provide for the continuation of existing hydroelectricity and irrigation schemes and other existing water takes, uses, damming and diversions, which involve substantial investment in infrastructure, as appropriate; and Require these existing activities to make on-going improvements in water efficiency and reductions in adverse environmental effects, as appropriate, including through reviewing conditions on resource consents. Policy Benefits of renewable energy generation facilities Methods The Canterbury Regional Council: Will: (1) Set out objectives and policies, and may include methods in regional plans that recognise the local, regional and national benefits of a renewable energy supply, including security of supply, providing for electricity capacity, and assisting in meeting international climate obligations. Policy Efficient, reliable and resilient electricity generation within Canterbury Methods The Canterbury Regional Council: Will: (1) Set out objectives and policies, and may include methods in regional plans to: (a) avoid activities on the beds of lakes and rivers, and uses and developments that impact on the generation capacity from, and/or the maintenance and upgrading of consented and existing (b) electricity generation infrastructure; and provide for the full operation, and maintenance and/ or upgrading of, existing generation infrastructure; (c) provide for activities associated with the investigation, identification and assessment of potential sites and energy sources for electricity generation; (d) enable the upgrading of existing and establishment of new electricity generation infrastructure within the coastal marine area and in the beds of lakes and rivers, while avoiding, remedying or mitigating adverse effects including through the use of best practice approaches to design, construction and effect management.

13 Page 11 of Section 67(3)(c) of the RMA requires that PC3 must give effect to the RPS. Giving effect to the RPS does not require repeating each and every provision in the Waitaki Plan. However, the Waitaki Plan does need to positively implement the prescriptive and clear directions contained in the above RPS provisions. In my opinion, this includes, for example, positive measures to recognize Policy , Method (1) (a) 11 and Policy , Method (1) (b) SUBMISSIONS MADE BY GENESIS ENERGY ON PC3 Introduction 4.1 Genesis Energy lodged a submission and further submissions in relation to provisions in PC3, and in principle strongly supported the provision of greater certainty in the Waitaki Plan for the replacement of resource consents for existing hydroelectricity generation infrastructure. I comment further on some of the specific submission points in my evidence below. 4.2 Proposed Rule 15A in PC3 seeks to implement Objectives 1 and 2 of the Waitaki Plan through providing for hydroelectricity generation to the extent consistent with Objective 1. Objective 2 of the Waitaki Plan is to enable people and communities to provide for their social, economic and cultural wellbeing and their health and safety, by providing for water for hydro-electricity generation. In that regard, I support changing the activity status for hydroelectricity generation activities from the present discretionary status afforded in the operative Waitaki Plan. 4.3 However, I consider that the Waitaki Plan does not contain appropriate certainty or direction in respect of how replacement consents for existing hydroelectricity generation will be considered. In turn, in my opinion the Waitaki Plan does not appropriately implement the statutory direction to provide for existing hydroelectricity generation which I have outlined in Section 3 of this evidence statement Recognise and provide for the continuation of existing hydro-electricity and irrigation schemes and other existing water takes, uses, damming and diversions, which involve substantial investment in infrastructure, as appropriate. Provide for the full operation, and maintenance and/ or upgrading of, existing generation infrastructure.

14 Page 12 of In that regard I consider the general approach contained in the Proposed Land and Water Plan for these replacement consent processes is the correct one insofar as it includes the following principles: There is no practical alternative to the continued use of the existing hydroelectricity generation schemes; and When considering the place of the schemes in the sustainable management of Canterbury s natural and physical resources, focus should be on how the hydroelectricity schemes manage their effects on the environment, rather than debating the merits of their continued existence In following the above principles, I consider that, as with the Tongariro Power Scheme, it is inconceivable that the Tekapo Power Scheme would cease operating at the expiry of its resource consents. Rather, the focus should be on the conditions under which the scheme should continue to operate. In my opinion, this is the very situation that a Controlled Activity status is intended to provide for. Any other status other than this that requires a resource consent clearly contemplates that the consent may be declined and (in this case) the scheme would be expected to cease operating. 4.6 A Controlled Activity status enables control to be reserved over the matters of concern with respect to the future operation of the scheme, and conditions to subsequently address those matters at the time a replacement consent is sought. 4.7 Implementing this approach within the Waitaki Plan would involve affording replacement applications for water permits for existing hydroelectricity generation schemes more enabling activity status than the Waitaki Plan does at present. 14 I do not consider that new Rule 15A is not sufficiently enabling in that regard. In particular, I support the Genesis Energy submission that: The take, dam, divert or use of water for hydroelectricity generation in the Waitaki Plan should be a controlled activity 15 in line with the Lower Waitaki See for example section of the Proposed Land and Water Plan. Applications would be at best discretionary activities under the Waitaki Plan. Submission number 3228.

15 Page 13 of 20 South Coastal Canterbury Zone Committee ( Zone Committee ) recommendations; Additional supporting policy direction is needed for proposed new Rule 15A which explicitly directs the consent authority to consider the existing hydroelectricity generation scheme part of the existing environment when considering the application, and to focus on managing its effects rather than the merits of its continued existence; 16 and The matters of discretion / control need to be tightened so the merits of environmental flow and levels regimes set in the Waitaki Plan cannot be relitigated during resource consent hearings. 4.8 I discuss these matters further below. Controlled Activity Status for Existing Hydroelectricity 4.9 As I have outlined, I consider that Rule 15A (take, dam, divert or use of water for hydroelectricity generation) should be a controlled activity, rather than a restricted discretionary activity as proposed in PC3. I note that both Genesis Energy and Meridian Energy 17 both sought controlled activity status for this activity in Rule 15A The PC3 Section 32 report and the Section 42A report recommends that Rule 15A remains as notified (i.e. restricted discretionary activity status). I note the reason put forward in the Section 32 report 18 for rejecting the Zone Committee s recommendation for controlled activity status is that it is not able to do so because the decision on the proposed Land and Water Regional Plan concluded that a controlled activity status for replacement consents would not be consistent with the scheme of the Act. As is noted in the Section 32 report 19 that decision has been appealed to the High Court, and consequently the merits of Controlled Activity status as an alternative to the proposed rule have not been evaluated Submission number Submission number Waitaki Catchment Water Allocation Regional Plan, Proposed Plan Change 3 and Section 32 Assessment, June 2014; page 12. Ibid, page 12.

16 Page 14 of I understand that the decision on the proposed Land and Water Regional Plan is not binding on the consideration of PC3. I also understand the parties to the High Court appeal proceedings agreed that an error of law was made in determining that the RMA prohibits or effectively prohibits a rule in a plan having controlled activity status for activities such as hydroelectricity generation schemes in a regional plan or limits its discretion to determine such an activity status in regional plan decisions and the Council agreed to abide the High Court decision. I do not consider that the appeal proceedings should constrain any decisions being made in relation to PC The submission by Genesis Energy (and Meridian Energy) to change the activity status for replacement hydro-electricity consents from restricted discretionary to controlled in PC3 requires an evaluation under section 32 of the Act. As I have outlined, this has not been undertaken by Council in the section 32 evaluation for PC3, therefore for completeness I have provided such an evaluation (in a format consistent with the section 32 report) in Appendix 1 to my evidence In respect to the effectiveness of the provision in achieving the objectives, the section 32 evaluation in Appendix 1 shows that overall amended Rule 15A is an efficient means of achieving the Waitaki Plan s objectives by ensuring on-going access to water for renewable electricity generation while matters of control will ensure that environmental flow regimes set by the Waitaki Plan are implemented and the opportunity for environmental flows to be considered where the Waitaki Plan has not already established them. The amended Rule 15A is effective in providing certainty in the re-consenting of a resource with national and local benefits and retains sufficient control of relevant matters such as providing for full public participation (through specifying public notification) I have undertaken an assessment of the benefits and costs of amended Rule 15A in accordance with the requirements of section 32 of the Act (see Appendix 1). As shown in this evaluation, the costs are low, while the environmental, economic, social and cultural benefits are considerable. In particular, amended Rule 15A recognises and provides for efficient and reliable electricity within Canterbury by maintaining hydro-generation output and enabling maximum supply benefit to be obtained from existing generation facilities.

17 Page 15 of The Section 42A report acknowledges 20 that there is no statutory reason why the renewal of a water permit could not be classified as a controlled activity. In the meantime, the Section 42A report 21 states that the situation reported in the Section 32 report remains the same and that until the determination is made, the appropriateness or otherwise of controlled activity status has not been evaluated Having said that, the Section 42A report goes further and states 22 that even if controlled activity status is available, the question of whether controlled activity status is the most appropriate for achieving the objectives of the plan, having regard to its efficiency and effectiveness, is a matter that would require further consideration having heard the evidence In my opinion, a key part of enshrining the resource management approach contained in the Proposed Land and Water Plan for replacement resource consent applications for hydroelectricity schemes in the Waitaki Plan, as I have outlined earlier in my evidence, is for the take, dam, diversion or use of water by the existing hydroelectricity generation schemes to be provided for as a controlled activity, in line with the Zone Committee s recommendations It is clear that the hydroelectricity schemes on the Waitaki River are of national significance, and together they form a substantial body of renewable electricity generation. They also represent substantial sunk investment cost and in the context of the RMA are longstanding physical resources which have formed part of the existing environment since the middle of the last century Accordingly I consider that resource consents for all ongoing uses of existing electricity generation infrastructure on the Waitaki River should be provided for as a controlled activity. I note that some parties express the view that affording controlled activity status to all activities associated with existing hydroelectricity generation schemes is inappropriate as some of those activities may be contentious, particularly for example with respect to the National Policy Statement for Freshwater Management In my view this is not a valid reason for not attributing controlled activity status, as those matters that are contentious can be dealt with through the Plan Change 3 to the Waitaki Catchment Water Allocation Regional Plan, Section 42A Report Report No. R15/47, April 2015; paragraphs 29.26, 29.29, Ibid, paragraph Ibid, paragraph

18 matters over which control is reserved. Page 16 of 20 Should, for example, it be decided the current flow regime of a hydroelectricity generation scheme is inappropriate, a more appropriate flow regime could be prescribed within the conditions of the consent that was granted I also note that this approach is not unusual in a national context and there are many examples around New Zealand where a Controlled Activity status is afforded to a variety of activities in Regional Plans throughout New Zealand, including replacement consents for existing hydroelectricity generation infrastructure. This includes activities relating to the damming of rivers or streams, existing activities, discharges of water and contaminants, discharges of stormwater, maintenance of structures, the taking of water, and the diversion of rivers or streams, all of which may include hydroelectricity generation scheme activities By way of example, the Hawkes Bay Regional Plan includes a Controlled Activity rule (Rule 68) for existing damming of water in rivers and lakes, while the Bay of Plenty Regional Plan, Waikato Regional Plan and Horizons One Plan include Controlled Activity rules for a variety of activities, including for example: a) Lawfully established hydroelectric power schemes, including the discharge of water to water, discharges of contaminants to water, the take and use of water (including non-consumptive use), the damming and diversion of water; and the use of a structure in the bed of a stream or river (Bay of Plenty Regional Water and Land Plan Rule 47C); b) Existing lawfully established damming of perennial water (Waikato Regional Plan Rule ); c) Existing lawfully established diversions and discharges (Waikato Regional Plan Rule ); d) Existing lawfully established structures (Waikato Regional Plan Rule ); e) Extraction of bed material and disturbance of river and lake beds associated with lawfully established structures (Waikato Regional Plan Rule );

19 Page 17 of 20 f) Replacement consents for discharges of water and contaminants to water and land from existing hydroelectricity schemes (Horizons One Plan Rule 14-29); g) Replacement consents for takes and uses of surface water by existing hydroelectricity schemes (Horizons One Plan Rule 16-7); and h) Replacement consents for existing damming of water (Horizons One Plan Rule 17-8) Controlled activity status would mean the continued existence of the Waitaki Catchment hydroelectricity generation schemes would not be a matter open for debate when applications for new water permits for those schemes are being considered. As I have noted previously, I consider it inconceivable the Waitaki and Tekapo Power Schemes would be expected to cease operating once their present consents expire, and in that regard it is important (particularly, for example, in terms of giving effect to the NPSREG) that certainty is provided to the consent holders that their operations can continue. Controlled Activity status would enable this and provide the required certainty Controlled Activity status would enable the Council to impose appropriate conditions to manage the effects of the schemes in respect of matters over which it has retained control. This appropriately recognises that the Waitaki Catchment hydroelectricity generation schemes are nationally significant longstanding physical resources that are part of the existing environment and their continued operation will enable people and communities (locally, regionally and nationally) to provide for their social, economic and cultural wellbeing and for their health and safety I also note that if the conditions contained in Rule 15A were retained in an amended rule the take, dam, diversion or use of water by an existing hydroelectricity generation scheme would only be a controlled activity if it complies with the environmental flow and level regimes set in the Waitaki Plan (Rule 2), the minimum lake levels in the Waitaki Plan (Rule 3), the annual allocation to activities in the Waitaki Plan (Rule 6) and the flow provision into the Lower Waitaki River (Rule 7) which have all been deemed to promote sustainable management. Applications which do not comply with these rules would remain non-complying activities, and activities which do not comply with the minimum lake levels would remain prohibited.

20 Supporting Policy Framework for New Rule 15A Page 18 of Policy 28 of the Waitaki Plan addresses applications for replacement of existing consents however it does not adequately reflect the breadth of directives which should be imposed on the consent authority when considering applications for replacement of existing consents for hydroelectricity generation in the Waitaki Catchment. In this regard Genesis Energy submitted that an additional clause (d) be added to Policy 28 as follows: (d) consider existing hydroelectricity schemes as part of the existing environment, and focus on how the hydroelectricity schemes manage their effects on the environment, rather than the merits of their continued existence The section 42A report states that the additional clause extends beyond the scope of proposed Rule 15A. I disagree with this assessment. As noted previously, PC3 must give effect to the RPS (amongst other matters), and any rules proposed must have a policy basis in the Waitaki Plan. In this instance, for example, I consider that PC3 must give effect to RPS Policy (Existing activities and infrastructure), (Benefits of renewable energy generation facilities) and Policy (Efficient, reliable and resilient electricity generation within Canterbury) in the RPS I consider it appropriate that an additional provision should be included in Policy 28 to support the inclusion of new Rule 15A, irrespective of whether the activity status under Rule 15A is controlled or restricted discretionary. This additional provision would require that when considering the place of an existing hydroelectricity scheme in the sustainable management of the Waitaki Catchment s natural and physical resources, focus should be on how the hydroelectricity scheme manages its effects on the environment, rather than debating the merits of its continued existence. This is consistent with the approach taken in the RPS and the Canterbury Land and Water Plan. Matters of Discretion / Control 4.28 In respect to matters of control for Rule 15A, Genesis Energy submitted in support that in the event a minimum flow has not been set for the Tekapo River when applications are made for replacement consents for the Tekapo Power Scheme, that the adverse effects of the Scheme on the Tekapo River should be a matter that is

21 Page 19 of 20 able to be considered, and that the consent authority should be able to impose appropriate conditions to avoid, remedy or mitigate those adverse effects I support that approach as being an integral part of a Controlled Activity approach Genesis Energy also submitted that they agree in principle with Rule 15A removing the opportunity for the consent authority to reconsider environmental flow and level regimes which have been set in the Waitaki Plan in a resource consent process (including any minimum flow ultimately set in the Waitaki Plan through the Schedule 1 process for the Tekapo River). I agree in general terms with that approach, although I consider that if such environmental flow and level regimes have been set through a Schedule 1 / Plan process, then they should not be revisited to address other related matters that may arise through a consent process For PC3, despite locking in those environmental flow and level regimes, in my opinion the matters of discretion / control contained in proposed Rule 15A(2) are not sufficiently clear that the merits of those flow regimes are not a matter up for discussion during resource consent processes. While I accept there should be scope to consider mitigation measures for matters which the flow and level regime set in the Waitaki Plan are not intended to address, the merits of that environmental flow or level decision should not be open for re-litigation during the consent process If an environmental flow or level decision has been reached through an open Plan process, then a consent applicant should be entitled to consider that that environmental flow or level regime would apply to their application. If there are matters that are not specific to environmental flows or levels that have not been addressed by the specific plan provisions, then I agree that the opportunity should be available to the regulatory authority to consider additional mitigation conditions. 5. CONCLUSION 5.1 Overall, I support the provision of greater certainty in the Waitaki Plan for the replacement of resource consents for existing hydroelectric generation infrastructure, however to appropriately recognise that the Waitaki Catchment hydroelectricity generation schemes are nationally significant features of the existing environment, the take, dam, divert or use of water for hydroelectricity generation in the Waitaki

22 Page 20 of 20 Plan should be a controlled activity. This is in accordance with the Zone Committee s recommendations and the resource management approach for these replacement consents in the Proposed Land and Water Plan. Richard Matthews

23 Page i APPENDIX 1 Section 32 Evaluation of Controlled Activity for Existing Hydro-electricity Generation

24 Effectiveness Page ii Provision for a controlled activity for existing hydro-electricity generation. The evaluation of the effectiveness of the rule in relation to providing greater security and certainty for replacement of consents for hydro-electricity generation activities in the catchment is summarised in the table below. Objective Rule Effectiveness 1 Matters of control for amended Rule 15A will ensure that environmental flow regimes set by the Waitaki High effectiveness Plan are implemented. This will consequently ensure that the qualities of the environment of the Waitaki River, as identified in Objective 1, are sustained. 2 The proposed rule provides for replacement consents for hydro-electricity as envisaged by Objective 2, and will therefore enable people and communities to provide for their social, economic and cultural wellbeing and their health and safety. 3 The matters of control for Rule 15A require consideration of beneficial and adverse effects, including effects on Ngāi Tahu culture, on rivers where environmental flow and level regimes have not been set in the Waitaki Plan, and mitigation measures to address adverse effects on those rivers where an environmental flow regime is in place. This achieves Objective 3. High effectiveness High effectiveness

25 Benefits and Costs Page iii Provision for a controlled activity for existing hydro-electricity generation. The evaluation of the benefits and costs of proposed Rule 15A is summarised in the table below. Benefits Environmental Ensures environmental flows and level regimes address environmental effects Economic Provides for the continued operation of the Waitaki Power Scheme. Costs Environmental No environmental costs anticipated Economic No economic costs anticipated Provides certainty to hydro-electricity generators and the community in respect to continued access to water for electricity generation. Social Provides security of supply, recognises the national significance of the hydroelectricity generation assets and sunk investment made. Social No social costs anticipated Contributes to the health and well-being of the local, regional and national population. Retains public participation by requiring public notification of applications. Cultural Provides opportunity for consideration of Ngāi Tahu culture, traditions, customary uses and relationships with land and water (through mitigation) when replacement applications are made. Cultural No cultural costs anticipated