Variation 6 - Water Allocation

What were we up against and what was achieved?- Irrigation perspective

Dr Paul Le MièreRegional Policy Manager

Contents

• Background• What we were up against• Inter primary sector tensions• Achievements• Lessons• Emerging issues

What is Variation 6?

• WRC attempt at a set of rules on Water allocation for Waikato

• Brought about due to large upper Waikato irrigators applying for large volumes of water and growth of municipal demand.

• WRC allowed catchments to go over allocated for last twenty years.

• Used % of Q5 (one in 5 year low flow) as measure of allocation (up to 30% of Q5)

What were we up against

- Variation 6-• Rules prioritised consents at common expiry dates.– existing municipal user, then – new municipal users, – then existing industrial users (inc. farmers, irrigators)– then new industrial users.

• Even if existing, at 100% allocation farm takes were Non Complying.

• All takes, even minor, had to be metered and reported on• Hydro-electricity generation was prioritised above Karapiro. (RE

NPS). Philosophical stance to give 96.4% of Q5 to hydro (>99% of flow)

• Water harvesting not enabled. MRP advocated a no spill hydro system!

• Fresh Water NPS not in force until EC hearing stage.• Council very intransigent and refused to Mediate.• Many large players protecting their interests: - Municipal, MRP, Agriculture & Horticulture, CHH, etc

Tensions within PP sector

• Council allowed many catchments to go over allocated over last couple of decades.

• Majority of Dairy farmers (95%) unwittingly did not have the dairy shed washdown consents they technically should of.

• Thus tension between legitimising existing dairy activities and protecting consented activities such as irrigation and Milk factories takes.

• Compounded by lack of information of water efficiencies and economic importance of takes.

0

50

100

150

200

250

DairyShed Wash-down

Domestic + Stock Drinking (14(3)(b)

Consented (irrigation, Municipal, etc.)

Non-Complying

---------------------------------Discretionary

---------------------------------Controlled

Paiko catchment (200-700% overallocated)

What would it have meant?

• All Dairy farmers in over-allocated catchments would have had to apply for very expensive and onerous consents (non- complying) and most of these would not have been granted.

• Other catchments still a discretionary consent for existing takes.

• Most of the rest facing cost increases for water.

• No Dairy increase in upper Waikato and issues for those converted since 2006.

• Consented Irrigators (Ag/Hort) up for renewal became non complying

Timelines• 2004-6 Developed by regional council. • Oct 2006 Variation Notified• Dec 2007 – Mar 2008 Hearings – Extensive evidence by AWG• Oct 2008 Decisions Version• Jan 2009 Parties Appeal to EC• Mar 2009 - Early 2010 ‘Meetings’. NO mediations.• Aug 2010 WRC evidence received• Sept 2010 New WRC version - Major changes• Oct 2010 All appellants evidence in (>50 documents)• Dec 2010 - Feb 2011 EC Hearings start • Apr – June 2011 Expert witness caucusing (many changes) • July 2011 Closing Legal arguments from appellants• Dec 2011 Environment Court decision released• Jan 2012 Variation 6 has full legal effect• Apr 2012 WRC formally adopts Variation 6

Millions of dollars spent especially at EC.Now in implementation stage, >4000 consents by end 2014

Outcomes Achieved

Asked for Final Version Changes

Acknowledgement of primary production

Explicit statements of importance of Primary production in Issues and Objectives

Delete Order of priority Policy

Deleted

Protect existing dairy water takes

Controlled rule (15 years) to ’grandparent’ existing dairy takes esp. in overallocated catchments

Increase allocable % above Karapiro

Increase to 5% given from 3.6%. Important for irrigation. Worth $150m to $200m .

Less metering requirements

Only require metering above certain pump size

Increased priority for dairy water

Now dairy shed washdown same as drinking water and 2nd best priority.

Lessons Learned

• All Primary production sectors needed to work together sooner and better.

• Information was lacking on Ag primary sector water use and economics.

• Information on water use efficiency lacking

• Early effort into mediation needed and collaboration paramount. WRC now trying collaborative governance model !

• Need rules before you are over allocated.

Emerging issues

• WRC needing major help and resources for primary industry to help obtain >4000 consents by end of 2014

• Watercare consent for Auckland for up to 200,000m3 a day lodged (2% of Q5 at take).

• Any potential clawback from Watercare over allocating whole of river very unclear.

• Wairakei Thank You

Questions ?

Above Karapiro evidence

• WRC set above Karapiro at 3.6% of Q5– Based on Oct 2006 useage – rest for MRP– <1% of river flow

• Scenario A – Increase to 4% Q5– Need for existing growth since Oct 2006– Max 120,000 Ha converted to Dairy (Drinking + dairy

shed)• Value farm gate $177,561,800 @ 09/10 payout

• Scenario B – Increase to 5.8% of Q5– Scenario A plus– 10 years future irrigation Demand (4,000 Ha)

• Scenario C – Increase to 7.5% of Q5– Scenario A plus– 20 years future irrigation Demand (8,000 Ha)

Cost of MRP

• Complicated as modeled per dam per week.Lost Generation Cost to MRP :

– Scenario A - $160,000 p.a.– Scenario B - $840,000 p.a.– Scenario C - $1,500,000 p.a.

• Overall Very minor under A and B• No material impact on wider NZ electricity

industry– Easily replaced by renewable coming online– And industry own savings– Scenario A – replaced by 5-6 turbines !

Conditions around grandparenting takes

To secure existing Dairy shed takes under controlled activity:• Need to lodge application by 1 Jan 2015• Net Amount needs to be same or less than 15 Oct 2008

(prev 2006)• Stock need to be fenced 3m from river water is taken

from (Completed 3 years from consent given)• Riparian planting to take place along water body from

which take occurs. – 3m wide– If no planting exist then 2500 stems Ha / 80% native.– To take place progressively over term of consent

(normally 15 years)

Conditions around grandparenting takes

To secure existing Dairy shed takes under controlled activity:• Need to lodge application by 1 Jan 2015• Net Amount needs to be same or less than 15 Oct 2008

(prev 2006)• Stock need to be fenced 3m from river water is taken

from (Completed 3 years from consent given)• Riparian planting to take place along water body from

which take occurs. – 3m wide– If no planting exist then 2500 stems Ha / 80% native.– To take place progressively over term of consent

(normally 15 years)

Stock Water – Surface Takes

Existing Takes

Catchment allocation

Appealedversion

Final Version

< 15m3 =>100% Discretionary

Allowed

< 100% Allowed Allowed

> 15m3 =>100% Discretionary

Allowed

< 100% Allowed AllowedNew Takes

Catchment allocation

Appealedversion

Final Version

< 15m3 =>100% Discretionary

Discretionary

< 100% Allowed Allowed

> 15m3 =>100% Discretionary

Discretionary

< 100% Allowed Allowed

Dairy shed - Surface Takes

Existing Takes

Catchment allocation

AppealedVersion

Final Version

< 15m3 =>100% Discretionary Permitted

< 100% Permitted Permitted

> 15m3 =>100% Non-Complying

Controlled*

< 100% Controlled Controlled*

New Takes

Catchment allocation

Appealedversion

Final Version

< 15m3 =>100% Discretionary Discretionary

< 100% Permitted Permitted

> 15m3 =>100% Non-Complying

Non-Complying

< 100% R Disc. / Cont R Disc./ Cont