Bay of Plenty Regional Council v Fonterra Co-operative Group Ltd and Another (Decision).doc (rp)

• Jurisdiction: New Zealand
• Judge: J A Smith,ACE Leijnen,H A McConachy
• Judgment Date: 22 February 2011
• Neutral Citation: [2011] NZEnvC 73
• Docket Number: (ENV-2010-AKL-000274)
• Court: Environment Court
• Date: 22 February 2011

BETWEEN

In the matter of an application for' declarations pursuant to Section 310 of the Resource Management Act 1991 (the Act)

Bay of Plenty Regional Council

Appellant

and

Fonterra Co-Operate Group Limited

First Respondent

Trustpower Limited

Second Respondent

[2011] NZEnvC 73

Court:

Environment Judge J A Smith Environment Commissioner ACE Leijnen Environment Commissioner H A McConachy

(ENV-2010-AKL-000274)

BEFORE THE ENVIRONMENT COURT

Application for a declaration to hear the second respondent's (Trustpower) application for a resource consent first — both respondent's had expired resource consents for the use of the Rangitaki River — second respondent's consent related to a dam — first respondent's consent related to discharge of contaminants — whether second respondent's application should be considered first — whether existing environment for the purposes of second respondent's application included existing resource consents and those continuing under s124 Resource Management Act 1991 (exercise of resource consent while applying for new resource consent).

Appearances:

Mr P H Cooney & Ms R C Zame for Bay of Plenty Regional Council (the Regional Council)

Ms J M Appleyard & Ms P Brosnahan for Fonterra Co-operative Group Limited (Fonterra)

Ms V J Hamm & Ms L C R Burkhardt for TmstPower Limited (TrustPower)

• A. The Court intends to make the following declarations:

  • 1. That the application for resource consents to replace existing consents for the Matahina Dam and Hydropower project on the Rangitaiki River should be heard and determined prior to consideration of Fonterra Co-operative Group Limited's (Fonterra) application for consents to discharge wastewater to the Rangitaiki River for its milk processing plant at Edgecumbe;

  • 2. That when considering the TrustPower application, the consent authority must take into account the existing resource consent granted to Fonterra for its discharge to the Rangitaiki River, as it is currently preserved by Section 124 of the Act;

  • 3. That the existing environment for the purposes of that application hearing includes existing resource consents and those continuing under Section 124 of the Act, together with permitted activities under the Regional Plans, and any granted but unimplemented consents (which may be considered at the discretion of the consent authority);

  • 4. Although the consent authority has the power to include a review condition on the TrustPower consent to be implemented once the Fonterra consents are determined, it is not able to predicate the outcome of that consideration or reach any firm conclusion as to the wording of any further condition should be until the outcome of the Fonterra application is known.

• B. Parties are to file and serve any comments on the proposed declarations within 10 working days and any replies within 5 working days thereafter. The Court does not intend to make any order for costs. Parties may also comment on this matter on the same basis as the declarations.

REASONS FOR THE DECISION

Introduction

1 This case raises issues of wide general importance. Originally framed as an application for priority between two existing uses of the Rangitaiki River, the case volved to one defining the existing environment in the context of the TrustPower application for a resource consent.

2 Importantly in this case, both parties held resource consents which expired close to one another. The TrustPower consent expired in late 2009; that for Fonterra, in mid 2010. Both companies had lodged applications to replace these consents and had submitted on the other consent application. For reasons that are not entirely clear, the Regional Council was about to set down the Fonterra application for resource consent for hearing in April 2011. No date had yet been set for hearing the TrustPower application.

3 Not unnaturally, TrustPower objected, given that its application was earlier in time. The parties thus agreed that the best method forward was by way of declaration to determine the appropriate order for consideration of the applications. We agree entirely that this is an appropriate use of the declaration procedure, especially in a case such as this where significant assets are involved.

The Declarations Sought

4 Applications for declaration have been sought by the Regional Council as follows:

a. That the application for TrustPower for new consents to replace existing consents for the Matahina Dam on the Rangitaiki River should be heard before the Application by Fonterra for new consents to replace its existing consents to discharge wastewater to the Rangitaiki River for its milk processing plant at Edgecumbe;

b. That, when considering TrustPower's application, the consent authority must take into account the non-derogation principle in relation to the use of the Rangitaiki River flow/level to enable Fonterra to continue to use the river for the assimilation of discharged wastewater authorized under the existing consent (including its continuation under Section 124 of the Act);

c. That, when considering each Application, the consent authority is required, under Section 104(1)(a) of the Act, to assess each application against a ‘snapshot’ of the receiving environment that exists at the time the assessments is made, and not speculate as to the future ‘environment’ including not being able to impose conditions of consent that take into account a receiving environment that changes in the future.

5 A further declaration was sought by memorandum dated 26 November 2010 for TrustPower:

d. That if either party is entitled to hearing priority under the provisions in Sections 124A — C of the RMA, the mandatory, criteria set out at Section 124B(4) should be treated as considerations which inform whether it is appropriate for the application described in Section 124B(1)(b) to be granted consent on a basis which precludes the application described in Section 124B(1)(c) from being fully exercised.

6 Section 310 of the Act empowers the Court to make declarations as to the extent of functions, powers, rights or duties under the Act. The parties are agreed that the applications give the Court broad powers to make the declarations sought or any other appropriate declarations, or refuse the application (Section 313(a) —(c) of the Act). By the end of the hearing the parties were agreed that any declarations should be differently worded to those sought. We will discuss this further in due course.

The Matahina Scheme

7 TrustPower now owns the Matahina Hydro Electric Power (Matahina) Scheme which was originally developed consequent upon an order of the Council made on 14 January 1959. The New Zealand Electricity Department completed the construction in 1967 and secured the current renewal of damming and discharge consents in January 1990, the terms of which we will turn to shortly. These consents expired in late 2009 and an application for a single consent involving the renewal of the existing terms, with some modification, was made.

8 Matahina generates around 275GW hours of electricity per year, being approximately 10% of TrustPower's generation. The scheme impounds the flow of the Rangitaiki River to create Lake Matahina, which is approximately 6km long with a surface area of approximately 2.5km ². Of Matahina's total capacity of 55,000,000m ³, useable storage is approximately 6,600,000m ³ due to controls over the operating levels for the lake defined in the resource consent. It also appears that the power is approximately 30% less efficient at the bottom of the operating range than it is at the top. Penstocks convey water from Lake Matahina to the powerhouse. There are two penstocks with a maximum capacity of some 80 cumecs operating two generators and turbines. There is a spillway to allow overflows from the lake to be handled, and there is also a diversion tunnel on the left abutment of the dam that can be used to divert the flow of the river for upgrades or repairs, or dewatering in emergency conditions.

9 The current consents allow TrustPower to:

• [a] dam the Rangitaiki River to form Lake Matahina;

• [b] take, use and discharge up to 160 cumecs for electricity generation;

• [c] to discharge up to 1,980 cumecs over the spillway to the Rangitaiki River; and

• [d] to discharge up to 140 cumecs from the left abutment dewatering tunnel.

10 There are a suite of conditions that relate to each of these consents, and we attach for current purposes a copy of the current consents 22195-1 to 8. It is consent 22195-1 that was the focus of much of the hearing as this controls the operational minimal load and peaking (Condition 5.1). Annexed hereto and marked A is a copy of the resource consents for TrustPower.

11 The current application seeks renewal of the consents but with some variation of the terms and conditions. The application was filed in May 2009, more than 6 months prior to expiry of the consent.

The Fonterra Consent

12 Operated initially as Bay Milk Products and subsequently as Anchor Products, this is a significant dairy manufacturing site at the corner of Awakeri and Eastbank Roads in Edgecumbe, adjacent to the Rangitaiki River (Edgecumbe site). It has been in its current location since 1923. It is unclear when the consents for the discharges to the Rangitaiki River were first obtained, but they were last renewed in 1995. The consents currently held for the Edgecumbe site relating to the Rangitaiki River are all downstream of the Matahina Scheme by some 8km–10km, and include:

• [a] Consent 62000 to take water from the Rangitaiki River up to 30,000m (expires 30 June 2023);

• [b] Consent 24211, authorising the discharge of dairy factory and distillery wastewater, cooling water, and water treatment sedimentation solids to the Rangitaiki River (expired 30 June 2010);

• [c] Consent 24212 authorising the discharge of stormwater to the Rangitaiki River and the Eastbank Road drain...