BEFORE THE ENVIRONMENT COURT Decision No. [2011] NZEnvC 380 IN THE MATTER of appeals under Clause 14(1) of Schedule One of the Resource Management Act 1991 (the Act) BETWEEN CARTER HOLT HARVEY LIMITED (ENV-2009-AKL-000132) WAIHOU IRRIGATORS INCORPORATED & UPPER WAIKATO IRRIGATORS SOCIETY INCORPORATED (ENV-2009-AKL-000133) HAMILTON CITY COUNCIL (ENV-2009-AKL-000134) WAIPA DISTRICT COUNCIL (ENV-2009-AKL-000136) WAIKATO DISTRICT COUNCIL (ENV-2009-AKL-000137) WATERCARE SERVICES LIMITED (ENV-2009-AKL-000138) HORTICULTURE NEW ZEALAND (ENV-2009-AKL-000139) RAUKAWA CHARITABLE TRUST (ENV-2009-AKL-000149) TE RUNANGA 0 NGATI TAHU (NGATI WHAOA) (ENV-2009-AKL-000 ISO) WAIKATO-TAINUI TE KAUHANGANUI INCORPORATED (Successor to Waikato Raupatu Trustees Company Limited) (ENV-2009-AKL-000151) TUWHARETOA MAORI TRUST BOARD (ENV-2009-AKL-000153) DEPARTMENT OF CORRECTIONS (ENV-2009-AKL-000055) NEWMONT WAlHI GOLD LIMITED (ENV-2009-AKL-000092) MIGHTY RIVER POWER LIMITED (ENV-2009-AKL-000I07) (ENV-2009-AKL-000I08) (ENV-2009-AKL-000I09) (ENV-2009-AKL-00011O) (ENV-2009-AKL-000III) (ENV-2009-AKL-000112) (ENV-2009-AKL-000 113) (ENV-2009-AKL-000114) (ENV-2009-AKL-000115) (ENV-2009-AKL-000116) (ENV-2009-AKL-000117) (ENV-2009-AKL-000118) SOLID ENERGY NEW ZEALAND LIMITED (ENV-2009-AKL-000119) HAURAKI DISTRICT COUNCIL (ENV-2009-AKL-000120) WAIRAKEI PASTORAL LIMITED (ENV-2009-AKL-000123) WAIRARAPA MOANA INCORPORATION­ WAIRARAPA MOANA FARMS (ENV-2009-AKL-000124) TRUSTPOWER LIMITED (ENV-2009-AKL-000125) GENESIS ENERGY LIMITED (ENV-2009-AKL-000126) 2 CONTACT ENERGY LIMITED (ENV-2009-AKL-000127) FONTERRA CO-OPERATIVE GROUP LIMITED (ENV-2009-AKL-000I28) FEDERATED FARMERS (ENV-2009-AKL-000I29) MERIDIAN ENERGY LIMITED (ENV-2009-AKL-000I30) KING COUNTRY ENERGY LIMITED (ENV-2009-AKL-000I3I) Appellants AND WAIKATO REGIONAL COUNCIL Respondent Topic: Variation No.6 to the Proposed Walkato RegionalPlan Date of Decision: 30 November 2011 Hearing: InHamilton, 28 February - 4 March; 8 - 11 March; 21 - 25 March; 28 March - I April; 18 - 22 April; 1 - 6 May; 9 - 13 May; 16 - 20 May; 25 - 29 July; and 1- 4 August 2011. Court: Environment Judge R G Whiting Environment Commissioner K Prime Environment Commissioner M Oliver Deputy Environment Commissioner 0 Borlase Appearances: Mr J Milne and Ms N Rye for Waikato Regional Council Mr T Robinson and Ms R Dixon for Contact Energy Limited (Contact Energy) 3 Ms J Appleyard and Mr B Williams for Meridian Energy Limited (Meridian Energy) Mr P Green and Mr A Vane for Department ofCorrections Ms K Bellingham and Ms S Bradley for Director General of Conservation Mr S Berry and Ms J Vella for Waikato Region Municipal Users Group (Hamilton City Council, Waipa District Council, Waikato District Council, Watercare Services Limited, Taupo District Council) (Municipal Users Group) Mr P Lang for Matamata-Piako District Council Mr A Green for Hauraki District Council, and Solid Energy NZ Limited Ms H Andrews for Waikato-Tainui Te Kauhanganui Incorporated Ms J Forret and Ms A Twaddle for Raukawa Charitable Trust, and Ngati Tahu Ngai Whaoa Rununga Trust Ms L Burkardt for TrustPower Limited (TrustPower) Mr I Cowper and Ms J Munro for Mighty River Power Limited (Mighty River Power) Mr P Majurey and Mr T Hovell for Genesis Energy Limited (Genesis) Ms A Maddox and Ms C Faesenkloet for Newmont Waihi Gold Limited Ms G Chappell for Carter Holt Harvey Limited (Carter Holt Harvey) Mr A Hazelton for Horticulture New Zealand (Horticulture NZ) Mr A Braggins for Wairarapa Moana Incorporation (Wairarapa Moana) Mr J Hassan and Ms G Hamilton for the Agricultural Working Group (Fonterra Co-Operative Group Limited, Federated Farmers Limited, Waihou Irrigators Incorporated, Upper Waikato Irrigators Society Incorporated) (Agricultural Working Gronp) Mr T Daya-Winterbottom for Wairakei Pastoral Limited (Wairakei Pastoral) 4 DECISION OF THE ENVIRONMENT COURT The decision of the Waikato Regional Council is amended by substituting the Decision version of Variation 6 with the 8 August 2011 Version as set out in Appendix 2 save for the following: A. The primary allocable flow at Karaplro Dam is to be set at 5% of the Qs flow; B. Policy 8(c) is to be amended by adding the following words "that exceed the primary allocation in Table 3-5 and" after the opening words "Restricting takes" and before the words "which reduce" so that it shall now read: c) Restricting takes that exceed the primary allocation in Table 3-5 and which reduce the amount of water that would otherwise be available for renewable electricity generation or be used for cooling of the Huntly Power Station, including in particular any takes from the Waikato River catchment upstream of the HPS mixing zone that when assessed in combination with all other authorised water takes would exceed 100% ofthe primary allocable flows in Tabie 3-5. C. Rule 3.3.4.14 is to be amended by deleting the word "Existing" in the title to the rule and replacing it with "Replacing Authorised" so that it shall now read: Replacing Authorised ExisliRII Taking of Surface Water for Domestic or Municipal Water Supply. D. The Regional Council is to make any consequential amendments arising out of A, B or C within two calendar months from the date of issue of this decision. If there are any difficulties in implementing this direction, leave is granted to the Regional Council to apply to the Court for directions. 5 TABLE OF CONTENTS VOLUME I 1 INTRODUCTION 9 Variation 6 10 Chapter 3.3 Water Takes 11 Chapter 3.4 Efficient use ofwater 17 2 THE COUNCIL DECISION 18 3 STATUTORY BASIS FOR DECISION 19 4 THE RELEVANT STATUTORY PLANNING INSTRUMENTS 24 5 THE VISION AND STRATEGY FOR THE WAIKATO RIVER 34 6 ISSUES 39 6.1 ISSUE 1 Can Section 14(3)(b) Takes Be Constrained? 42 6.2 ISSUE 2 Protection ofwater for electricity generation and allocation preference 45 Introduction .45 Issue 2(i) The Degree ofProtection to be afforded Electricity Generation .45 Appellants' Relief... .46 The Problem - Lost Generation 48 Replacement ofLost Electricity Generation 51 The Importance ofElectricity 52 Mighty River Power's Resource Consents 55 The Importance ofAgriculture 56 Irrigation 58 The Economic Evidence 59 Evaluation ofCostlBenefit Analysis 65 Evaluation ofTssue 2(i) - Allocable Flow above Karapiro 67 Fixing the Allocable Flow above Karapiro 71 Issue 2(ii) Genesis -Increased priority for the Huntly Power Station 72 6.3 ISSUE 3 Policies 79 Issue 3(i) Adverse Effects vs Significant Adverse Effects - Policy l(d) 79 Issue 3(ii) Should the provisions relating to protection ofelectricity be more generic? Policy lA(e) and consequential provisions 80 Issue 3(lii) Should there be a new standalone policy espousing the importance ofrenewable energy generation? Proposed Policy 3A 80 Issue 3(iv) Municipal Supply Takes - Agricultural and Industrial Takes over 15m'/d - Policy 4 82 Issue 3(v) Volumetric Caps for Agricultural and Industrial Municipal Takes - Policy 4 and Rule 3.3.4.20 85 Issue 3(vi) Secondary Allocable Flow and Waikato River tributaries above Karapiro - Table 3-5 and Policy 4 87 6 Issue 3(vii) Priority for Drought Intolerant Crops in Time ofShortage - Policy 14 and Standard 3.3.4.21 88 Issue 3(viii) Consent Application Assessment Criteria - Surface Water and Groundwater Policies 8 and 9 91 Issue 3(ix) Restricting takes otherwise available to electricity generation - Policies 8(c) and 9(s) 92 Issue 3(x) Management of Groundwater - Policy 9(sa) 95 Issue 3(xi) Should there be policies directing decision-makers to generally not grant non- complying activity consents for the taking ofsurface water unless certain circumstances apply? Policies 9A and 9B 99 Issue 3(xii) Should Dairy Farms be Exempt from General Rules that Water Take Consents be for 15 years? Policy II(a)(v) 101 6.4 ISSUE 4 Rules and Standards 103 Issue 4(i) Wairakei Pastoral Limited - Specific Allocation Rules 103 Issue 4(ii) Winter Takes Above Karapiro - Restricted Discretionary Rule 3.3.4.15A 105 Issue 4(iii) Should Water Transfers be Made Less Restrictive? - Rule 3.4.4.3(i) 105 Issue 4(iv) Nutrient Management Plans - Rule 3.4.5.6 and Rule 3.4.5.7 106 Issue 4(v) Should Flows be Naturalised in the Waikato River below Lake Taupo? Standard 3.3.4.21 and Method 3.3.4.6C 108 Issue 4(vi) Should Table 3-5 have a Cross-Reference to Standard 3.3.4.21(1)? 113 Issue 4(vii) Should Water Shortage Restrictions Apply to Genesis? Standard 3.3.4.21 114 Issue 4(viii) Threshold Date 115 Issue 4(ix) Definitions 116 Issue 4(x) Mighty River Power - Addendum to Closing Submissions 118 6.5 ISSUE 5 Iwi Issues 121 Does Variation 6 give effect to the Vision and Strategy? 121 Should there be preferential access to water for "iwi development"? 124 Should rules providing for the transfer ofwater permits be included in Variation 6? 129 7 DETERMINATION 134 comment 135 7 Page No. VOLUME II 136 APPENDICES Appendix 1 List of Witnesses 137 - 140 Appendix 2 Proposed Variation No.6 - Water Allocation Version 141 - 220 dated 8 August 2011 Appendix 3 Line Wiring Diagrams ofProposed Variation 6 reflecting 221 - 227 the 8 August 2011 Version 8 1 INTRODUCTION [1] Variation 6 of the Proposed Waikato Regional Plan was promulgated by the Regional Council to address the adverse effects ofthe taking and use offreshwater, other than geothermal water, from ground and/or surface water resources within the Waikato region. [2] Water is an essential resource. The life-supporting capacity of water is expressly recognised in Section 5(2)(b) of the Act which requires it to be safe-guarded. Water is essential for the welfare of people.