Maintaining open dialogue

Working with our partners for good

Access to water is vital for our business and for New Zealand’s aspiration of net zero carbon by 2050, but we recognise it’s also held dear by a wide range of other parties.

These parties remain concerned about and fiercely protective of their rights around availability and their commitment to water quality. Wind energy too can be a challenging issue for communities, with locals holding and articulating clear opinions on the turbines we have in place. We acknowledge and respect that the resources we use are valued by many different stakeholders, and our relationships with the land and water sit alongside the relationships that other groups, including of course iwi and local communities, have with these areas. In FY20 we published our internal guidelines for engaging with stakeholders and invited our stakeholders to give us feedback on our approach.

The regulatory risk to our business

Depending on how policy settings evolve over time, the Government, local authorities and other regulatory bodies may impose restrictions, conditions and additional costs on our ability to access or use hydro sources that we may or may not be able to pass on to our customers. Those could include imposing minimum flow or maximum nutrient levels in rivers that have hydro generation, and imposing charges or royalty payments on water users. Plan changes could also adversely affect activities that are currently permitted without resource consents. National and regional water policies could be changed to allocate more water to agricultural users or to meet specified iwi interests or for other purposes, reducing the available flow from the Waitaki or Waiau catchment for Meridian.

Regulatory issues could also be exacerbated by climate change as weather becomes more variable and water more unpredictable for the needs of other users. This could reduce Meridian’s access to water either through direct government policy change (e.g. imposition of environmental taxes or through forms of water charging) or from local Resource Management Act (RMA) processes going through to the Environment Court. For example, increasingly frequent east coast droughts (particularly in the Canterbury region), alongside global demographics, could drive substantially more demand for irrigation water. This could significantly impact Meridian’s operating costs and/or erode our social license.

However, it is important to recognise that Aotearoa has the opportunity to decarbonise the economy through greater use of renewable electricity to supply increased demand to replace fossil fuels used in transport and industrial processes. Hydro generation is especially important as it is an existing form of renewable generation that can operate flexibly to support further renewable generation development and underpin the decarbonisation of other energy uses. It is crucial to the country’s climate change response Meridian works actively with Central Government agencies, local councils and stakeholders to help them understand the importance of this issue and to ensure that it is factored in and appropriately recognised in their thinking and relevant policy, planning and regulatory documents.

Reconsenting the Waitaki chain

The water resource consents for the Waitaki chain of power stations will come up for reconsent in 2025. This major catchment represents 18% of New Zealand’s power and requires respectful engagement with Ngāi Tahu and a range of other stakeholders. We’ve been working constructively alongside Genesis Energy, which also has consents in the chain.

Any changes to access to water would represent a significant financial risk for Meridian and for Aotearoa as it seeks to achieve its climate action goals. If we have less water to generate from, our ability to provide a steady return to our shareholders could be affected. Such a change would also reduce renewable hydroelectricity significantly and in turn compromise New Zealand’s progress in reducing its emissions. Coming to consensus and an arrangement that works for all parties is something that needs time, and our process for this is already well underway.

Part of wider conversations on water

The conversation around reconsenting is taking place at the same time as a range of other conversations on and regulatory processes involving water access, water purity and water rights. We’re pleased that recently passed clean-water legislation specifically excludes the five largest hydro schemes and ensures the output and flexibility of these schemes should be protected in order to maintain renewable electricity generation, ensure security of supply and support further decarbonisation of New Zealand’s economy. Meridian is strongly committed to clean water, and our exemption in no way compromises the water quality in our catchments.

Meridian’s Manapōuri and Waitaki schemes are two of the five schemes listed. The National Policy Statement on Fresh Water acknowledges the vital role that hydro schemes play now, and their increasingly important function as we move towards a carbon-neutral economy. This recognition is a huge positive for Meridian, its shareholders and its customers.

We remain committed to working in good faith with all those involved in seeing this large, complex and highly scrutinised process through to a satisfactory conclusion. The new approach seeks to prioritise healthy water ahead of human and commercial needs and we expect that in the catchments where we operate (Manapōuri and Waitaki), the perspectives and values of Ngāi Tahu for freshwater will be given greater priority than they have in previous resource management processes. This should be good for Ngāi Tahu and good for the environment.

Protection is also being put in place to maintain wetlands, and new rules will control winter grazing and other intensive farming practices. The Government is making $700 million available to help with activities to protect water quality and reduce the cost of change for landowners. There is no doubt that the measures should arrest the decline of water quality in New Zealand. If the changes are well implemented by councils and landowners, then improvement in water quality should be expected.

We value our relationships with iwi

We recognise the mana whenua of Ngāi Tahu, particularly in relation to our hydro schemes in the Ngāi Tahu takiwā and engage with them and other iwi in several ways. We recognise and respond to the kaupapa of ki uta ki tai (from the mountains to the sea) and work closely with local rūnanga (Arowhenua, Awarua, Hokonui, Moeraki, Ōraka Aparima, Waihao and Waihōpai) through Te Ao Marama and the Waitaki Governance Group as well as trusts to enhance mahinga kai and native fish in the Waitaki and Waiau catchments. We work with them of a range of topics including scheme operation, water management and Resource Management Act planning processes.

Offering support through Power Up

By building good relationships with and doing good by locals, we demonstrate that we want to be locally involved and supportive. It helps us build strong, mutual relationships with the local communities in which we operate. Part of building strong relationships is being open to feedback and working through grievances. We’ve a range of channels to ensure that our communities can voice their opinions and provide us with feedback on the work we’re doing.

For 13 years, our community fund Power Up has been supporting local projects in Te Āpiti, Mill Creek, Manapōuri, West Wind, White Hill, Te Uku and Waitaki. In that time we’ve been able to undertake a range of projects that are important to locals and have invested more than $8 million through 1,076 projects back into these local communities. The concept sprang from recognising that local employment helps small local communities to flourish and attracts people back to smaller towns.

In FY20, because of the impacts of COVID-19 on our communities, we put aside the usual application criteria and process and put a call out to see where support was most needed. $36,000 normally earmarked for educational, environmental and recreational activities was instead redirected to support community responses and needs. The money was used to assist the Raglan community and the Raglan Foodbank, to help families in Wellington’s Mākara community with internet access, to cover food and personal protective equipment costs for staff at the Whalan Lodge rest home in the Waitaki Valley, to pay for vital ICT resources to connect with patients at the Twizel Medical Centre, and to deliver more than 100 bags of food for volunteers at the Otematata Volunteer Fire Brigade to distribute to members of the local community.