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5. Allocation of water to activities

5.1 Introduction

This chapter summarises the Board's evaluation of the provisions of the Plan relating to the allocation of water to activities. The effectiveness, benefits and costs, and efficiency of the Plan provisions are examined. Where relevant, considerations of uncertain or insufficient information have been included in the assessment. Based on this evaluation, having regard to efficiency and effectiveness, the Board's overall judgement of whether the provisions are the most appropriate to achieve the objectives is recorded.

Within this chapter the matters considered are the:

allocation of water to activities
division of the annual allocation of water between activities
harvesting of water
mixing and use of water in and out-of-catchment.

Within the section on the allocation of water to activities, the examination focuses on the approach of allocating water to activities. Based upon this, the next section examines the actual division of water between activities, which is expressed in Rules 6 and 7 in the Plan.

A number of activities are exempt from the annual allocations to activities. These are:

the water taken and used is for an individual's reasonable domestic needs or the reasonable needs of an individual's animals for drinking water if the take and use does not, or is not likely to, have an adverse effect on the environment (Section 14(3)(b) of the RMA) or is for fire-fighting purposes (section 14(3)(e) of the RMA)
the amount of water taken or diverted from a river or stream is for a replacement consent not exceeding the allocation limits (Rule 2(1)(b) of the Plan)
the water for essential drinking, stock drinking-water, maintaining fire-fighting capacity, or for the processing and storage of perishable produce is exempt from minimum flow and level and flow-sharing regimes (Rule 2(2) of the Plan)
the water taken or diverted for micro hydro-electricity generation or for wildlife and fishery is exempt from the allocation limits (Rule 2(3) of the Plan).

In addition, the Board has considered the High Court decision Aoraki Water Trust v. Meridian Energy Limited [[2005] NZRMA 251; 11 ELRNZ 207 (Chisholm and Harrison JJ).] . The Board interprets the declaration decision as constraining its ability to allocate water, as a permitted activity, in a manner that would derogate from entitlements of existing consent-holders. It considers that it has met this constraint by not increasing the scope of the permitted activities from that authorised under the Canterbury Transitional Regional Plan (and its predecessor instruments) which prevailed when current consents were granted.

Finally, the Board specifically considered the agreement entered into by Mackenzie Irrigation Company Limited (MIC) and Meridian Energy Limited (MEL), by which, on certain conditions, MEL would make water available to the holders of shares in MIC for irrigation (MEL/MIC agreement). The Board is of the view that it is inappropriate for this agreement to be incorporated into the Plan. Even so, the allocation of water provided for in the Plan may enable effect to be given to the substance of the agreement.

5.2 Allocation of water to activities

5.2.1 Plan provisions

The relevant provisions of the Plan are:

Policies 1, 10, 11, 12, 13, 14 and 46
Rules 1, 6, 7, 9, 10, 11, 15, 16, 17, 18, 19, and 20.

5.2.2 Effectiveness

The Board's evaluation of the effectiveness of the provisions in the Plan relating to the allocation of water to activities is summarised in Table 16 below. In this circumstance, Objectives 2, 3 and 4 are relevant to the evaluation.

Table 16: Effectiveness of the provisions in the Plan relating to the annual allocation of water to activities

Objective	Provisions	Effectiveness
2	Allocation of water occurs either as a permitted activity or through the consideration of resource-consent applications. To achieve the allocation of water to activities identified in the Plan may take some time. Existing consents will dictate the distribution of the allocation of water until the consents expire. The effectiveness will be different throughout the catchment depending on the nature and extent of the existing consents, including when they expire.	Moderate
3	The allocation of water to activities recognises the beneficial effects on the environment and national and local benefits from the use of water.	High
4	The application of the efficiency provisions of the Plan to resource consents in locations where the allocation of water exceeds that set will promote a degree of technical efficiency. However, unless already provided for in the conditions of existing resource consents, it may not be possible to review existing resource consents to require a high level of technical efficiency prior to their replacement.	Low/Moderate
Overall effectiveness		Moderate

5.2.3 Benefits and costs

The Board's evaluation of the benefits and costs of the provisions in the Plan relating to the allocation of water to activities is summarised in Table 17 below.

Table 17: Benefits and costs of the provisions in the Plan relating to the allocation of water to activities

Benefits	Costs
Environmental The extent of the effect on the wider catchment environment is unknown as it is dependent on the use of the water, and the specific circumstances of the use. Water can be taken, diverted and returned to maintain and enhance wildlife and fishery values.	Environmental At times of cessation, in-stream values may be degraded by essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce. This effect will be small. The extent of the effect on the wider catchment environment is unknown as it is dependent on the use of the water, and the specific circumstances of the use.
Economic Allocation to activities provides greater certainty to potential users as to the availability, or otherwise, of water. This will assist in making investment decisions. Allocation to activities provides for existing and anticipated demand for water for a range of extractive activities. The approach avoids the 'capture' of water by a single activity. Certainty is provided that the water allocated to the specified activities will be available for use by those activities into the future. By providing an allocation to 'any other activities' unforeseen activities are not foreclosed. Certainty is provided to small takes within limited compliance costs. Economic benefit can be derived by hydro-electricity generation activities from the water left within the water bodies upstream of Waitaki Dam. Enables provision for essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce. Economic benefit can be derived from the water taken, diverted and returned for micro hydro-electricity generation. Economic benefit may be derived from the water the consent holder of Waitaki Dam is required to provide into the Lower Waitaki River.	Economic Allocation between competing uses may be suboptimal compared to leaving allocation between alternative uses to be decided on a consent by consent basis. Allocation of water to activities may be mismatched with current and future market demand. There will be limited flexibility to exchange water use between internal divisions of the regime. Compliance costs will occur in the administration of allocation of water to activities. Costs to existing consent-holders that have consents which fall outside of the allocation of water to activities. Any costs will not be incurred until the existing consents lapse. The allocation to activities regime will not have effect if they derogate from existing consents. Opportunity cost to hydro-electricity generation resulting from the water the consent holder of Waitaki Dam is required to provide into the Lower Waitaki River. This cost is limited by only actual needs being required to be released, and by the existing allocation through resource consents.
Social Enhanced secondary social wellbeing effects will be derived from economic benefits achieved from the use of water. Enables access by a diverse range of activities. The approach achieves a balance promoting long-term certainty while enabling social wellbeing. Enables provision for essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce. Small water takes enable social wellbeing.	Social Allocations enhancing social wellbeing effects cannot be effective if existing consents are derogated from. Potential loss of social wellbeing effects if the allocation of water to activities does not reflect socially optimal allocations. Once the allocation of water to activities is full, flexibility to reallocate water to socially desirable activities is low. Fewer secondary social wellbeing effects to communities may occur through a reduced amount of water being available to extractive uses.

Benefits

Costs

Environmental

The extent of the effect on the wider catchment environment is unknown as it is dependent on the use of the water, and the specific circumstances of the use.

Water can be taken, diverted and returned to maintain and enhance wildlife and fishery values.

Environmental

At times of cessation, in-stream values may be degraded by essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce. This effect will be small.

The extent of the effect on the wider catchment environment is unknown as it is dependent on the use of the water, and the specific circumstances of the use.

Economic

Allocation to activities provides greater certainty to potential users as to the availability, or otherwise, of water. This will assist in making investment decisions.

Allocation to activities provides for existing and anticipated demand for water for a range of extractive activities.

The approach avoids the 'capture' of water by a single activity. Certainty is provided that the water allocated to the specified activities will be available for use by those activities into the future.

By providing an allocation to 'any other activities' unforeseen activities are not foreclosed.

Certainty is provided to small takes within limited compliance costs.

Economic benefit can be derived by hydro-electricity generation activities from the water left within the water bodies upstream of Waitaki Dam.

Enables provision for essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce.

Economic benefit can be derived from the water taken, diverted and returned for micro hydro-electricity generation.

Economic benefit may be derived from the water the consent holder of Waitaki Dam is required to provide into the Lower Waitaki River.

Economic

Allocation between competing uses may be suboptimal compared to leaving allocation between alternative uses to be decided on a consent by consent basis.

Allocation of water to activities may be mismatched with current and future market demand.

There will be limited flexibility to exchange water use between internal divisions of the regime.

Compliance costs will occur in the administration of allocation of water to activities.

Costs to existing consent-holders that have consents which fall outside of the allocation of water to activities. Any costs will not be incurred until the existing consents lapse.

The allocation to activities regime will not have effect if they derogate from existing consents.

Opportunity cost to hydro-electricity generation resulting from the water the consent holder of Waitaki Dam is required to provide into the Lower Waitaki River. This cost is limited by only actual needs being required to be released, and by the existing allocation through resource consents.

Social

Enhanced secondary social wellbeing effects will be derived from economic benefits achieved from the use of water.

Enables access by a diverse range of activities.

The approach achieves a balance promoting long-term certainty while enabling social wellbeing.

Enables provision for essential takes (domestic, animal drinking and maintaining fire-fighting capacity) and takes for the processing and storage of perishable produce.

Small water takes enable social wellbeing.

Social

Allocations enhancing social wellbeing effects cannot be effective if existing consents are derogated from.

Potential loss of social wellbeing effects if the allocation of water to activities does not reflect socially optimal allocations.

Once the allocation of water to activities is full, flexibility to reallocate water to socially desirable activities is low.

Fewer secondary social wellbeing effects to communities may occur through a reduced amount of water being available to extractive uses.

5.2.4 Efficiency

Following the consideration of the benefits and costs of the provisions in the Plan relevant to the allocation of water to activities, it is the Board's judgement that these are of moderate/high efficiency.

5.2.5 Uncertain information

The Board is of the view that there is a risk of acting on the basis of current information as there is uncertainty about the extent that market conditions will change over time. Such changes may impact on the merits of the allocation of water between activities.

If, over time, the allocation of water between activities in the Plan ceases to be appropriate there is the ability to initiate a change to the Plan to address this. In addition, the non-complying activity status of resource consents to allocate water across an internal boundary of the allocation thresholds provides a degree of flexibility, depending on the individual circumstances of the application.

5.2.6 Appropriateness

The Board's evaluation of the effectiveness and efficiency of the provisions in the Plan relating to the allocation of water to activities is summarised in Table 18 below.

Table 18: Summary of the effectiveness and efficiency of the provisions in the Plan relevant to the allocation of water to activities

	Effectiveness	Efficiency
Allocation of water	Moderate	Moderate/High

Having regard to this information, including the risk of acting due to uncertain information, and taking into account the benefits and costs, it is the Board's judgement that the provisions in the Plan relating to the approach of specifying allocations of water to activities are the most appropriate to achieve the objectives of the Plan.

5.3 Division of allocated water between activities

5.3.1 Introduction

This section addresses the specific division of the annual allocation of water between activities in the Waitaki catchment. The Waitaki catchment is divided into four areas for the purpose of this assessment. These are:

upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau, and including Lakes Tekapo, Pūkaki and Ōhau
upstream of Waitaki Dam but not upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau
downstream of Waitaki Dam but upstream of Black Point
downstream of Waitaki Dam but downstream of Black Point.

The grouping for evaluation purposes of 'upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau, including Lakes Tekapo, Pūkaki and Ōhau' reflects commonalities in assessment.

5.3.2 Plan provisions

The provisions of the Plan relevant to the division of the annual allocation of water between activities:

upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau, and including Lakes Tekapo, Pūkaki and Ōhau are:
- Policies 7, 10, 11, 12, 13, 29, 31, 32, 33, 34, 35 and 36
- Rules 1, 6, 9, 10, 11, 15, 16, 17, 18, 19 and 20
upstream of Waitaki Dam but not upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau:
- Policies 7, 10, 11, 12, 13, 39, 40, 41, 42 and 43
- Rules 1, 6, 9, 10, 11, 15, 16, 17, 18, 19 and 20
downstream of Waitaki Dam but upstream of Black Point are:
- Policies 7, 10, 11, 12, 13, 44, 45 and 46
- Rules 1, 6, 7, 9, 10, 11, 15, 16, 17, 18, 19, 20 and 46
downstream of Waitaki Dam but downstream of Black Point are:
- Policies 7, 10, 11, 12, 13, 44, 45 and 46
- Rules 1, 6, 7, 9, 10, 11, 15, 16, 17, 18, 19, 20 and 46

5.3.3 Effectiveness

The Board's evaluation of the effectiveness of the provisions relating to the division of the annual allocation of water between activities is summarised in Tables 19, 20, 21 and 22 below. In this circumstance, Objectives 2 and 3 are relevant to the evaluation.

Table 19: Effectiveness of the provisions relating to the division of the annual allocation of water between activities upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau, and including Lakes Tekapo, Pūkaki and Ōhau

Objective	Provisions	Effectiveness
2	Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocations provide for existing water takes and those (generally abstractive) takes that can be reasonably foreseen, including by reference to the agreement entered into by Mackenzie Irrigation Company Limited and Meridian Energy Limited. However, water is fully allocated by existing resource consents. Therefore, the effectiveness of the provisions, in the medium term, depends on the existing consent-holder voluntarily giving up water. The annual allocation of water to activities regime may only be able to be fully implemented when these resource consents are considered as part of replacement resource-consent applications. The delination of upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau recognises the highest and high-value water for hydro-electricity generation to the extent consistent with the iconic values of these lakes and the natural character qualities of their tributaries. Implementation will occur through the permitted activity rules in the Plan, or through the consideration of resource consents as a discretionary activity for water within the annual allocation to activity regime and as a non-complying activity for water in addition to that allocated in the annual allocation to activities regime.	Moderate
3	The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation and agricultural and horticultural users. The provisions recognise both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.	High
Overall effectiveness	Moderate

Objective

Provisions

Effectiveness

Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocations provide for existing water takes and those (generally abstractive) takes that can be reasonably foreseen, including by reference to the agreement entered into by Mackenzie Irrigation Company Limited and Meridian Energy Limited. However, water is fully allocated by existing resource consents. Therefore, the effectiveness of the provisions, in the medium term, depends on the existing consent-holder voluntarily giving up water. The annual allocation of water to activities regime may only be able to be fully implemented when these resource consents are considered as part of replacement resource-consent applications.

The delination of upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau recognises the highest and high-value water for hydro-electricity generation to the extent consistent with the iconic values of these lakes and the natural character qualities of their tributaries.

Implementation will occur through the permitted activity rules in the Plan, or through the consideration of resource consents as a discretionary activity for water within the annual allocation to activity regime and as a non-complying activity for water in addition to that allocated in the annual allocation to activities regime.

Moderate

The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation and agricultural and horticultural users. The provisions recognise both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.

High

Overall effectiveness

Moderate

Table 20: Effectiveness of provisions relating to the division of the annual allocation of water between activities upstream of Waitaki Dam and not upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau

Objective	Provisions	Effectiveness
2	Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocations provide for existing water takes and those (generally abstractive) takes that can be reasonably foreseen, including by reference to the agreement entered into by Mackenzie Irrigation Company Limited and Meridian Energy Limited. However, water is fully allocated by existing resource consents. Therefore, the effectiveness of the provisions, in the medium term, depends on the existing consent-holder voluntarily giving up water. Consequently, the new annual allocation of water to activities regime may only be able to be fully implemented when these resource consents are considered as part of replacement resource-consent applications. The delination of upstream of Waitaki Dam but not upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau recognises the influence of the Waitaki Power Scheme. Implementation will occur through the permitted activity rules in the Plan, or through the consideration of resource consents as a discretionary activity for water within the annual allocation to activity regime and as a non-complying activity for water in addition to that allocated in the annual allocation to activities regime.	Moderate
3	The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation and agricultural and horticultural users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.	High
Overall effectiveness	Moderate

Objective

Provisions

Effectiveness

Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocations provide for existing water takes and those (generally abstractive) takes that can be reasonably foreseen, including by reference to the agreement entered into by Mackenzie Irrigation Company Limited and Meridian Energy Limited. However, water is fully allocated by existing resource consents. Therefore, the effectiveness of the provisions, in the medium term, depends on the existing consent-holder voluntarily giving up water. Consequently, the new annual allocation of water to activities regime may only be able to be fully implemented when these resource consents are considered as part of replacement resource-consent applications.

The delination of upstream of Waitaki Dam but not upstream of the outlets of Lakes Tekapo, Pūkaki and Ōhau recognises the influence of the Waitaki Power Scheme.

Moderate

The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation and agricultural and horticultural users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.

High

Overall effectiveness

Moderate

Table 21: Effectiveness of the provisions relating to the division of the annual allocation of water between activities downstream of Waitaki Dam but upstream of Black Point

Objective	Provisions	Effectiveness
2	Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocation to agricultural and horticultural activities provides for all existing water takes and those that can be reasonably foreseen within the local area. The delination of the Lower Waitaki River at Black Point provides the opportunity for water to be taken, used, and returned to the river upstream of Black Point, creating opportunity for hydro-electricity generation on that reach of the Lower Waitaki River most suitable for this purpose. Implementation will occur through the permitted activity rules in the Plan, or through the consideration of resource consents as a discretionary activity for water within the annual allocation to activity regime and as a non-complying activity for water in addition to that allocated in the annual allocation to activities regime.	High
3	The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation, agricultural and horticultural users and in-river users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment. The delination of the Lower Waitaki River at Black Point provides the opportunity for water to be taken, used, and returned to the River upstream of Black Point, creating opportunity for hydro-electricity generation on that reach of the Lower Waitaki River most suitable for this purpose.	High
Overall effectiveness	High

Objective

Provisions

Effectiveness

Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocation to agricultural and horticultural activities provides for all existing water takes and those that can be reasonably foreseen within the local area.

The delination of the Lower Waitaki River at Black Point provides the opportunity for water to be taken, used, and returned to the river upstream of Black Point, creating opportunity for hydro-electricity generation on that reach of the Lower Waitaki River most suitable for this purpose.

High

The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly hydro-electricity generation, agricultural and horticultural users and in-river users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.

The delination of the Lower Waitaki River at Black Point provides the opportunity for water to be taken, used, and returned to the River upstream of Black Point, creating opportunity for hydro-electricity generation on that reach of the Lower Waitaki River most suitable for this purpose.

High

Overall effectiveness

High

Table 22: Effectiveness of the provisions relating to the division of the annual allocation of water between activities downstream of Waitaki Dam but downstream of Black Point

Objective	Provisions	Effectiveness
2	Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocation to agricultural and horticultural activities provides for all existing water takes and those that can reasonably be foreseen within the local area. Implementation will occur through the permitted activity rules in the Plan, or through the consideration of resource consents as a discretionary activity for water within the annual allocation to activity regime and as a non-complying activity for water in addition to that allocated in the annual allocation to activities regime.	High
3	The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly agricultural and horticultural users and in-river users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.	High
Overall effectiveness	High

Objective

Provisions

Effectiveness

Ensures that water is available for allocation between activities and uses enabling people and communities to provide for their social, economic and cultural wellbeing. The allocation to agricultural and horticultural activities provides for all existing water takes and those that can reasonably be foreseen within the local area.

High

The annual allocation of water to activities recognises that there are competing demands and tensions for the water resource and between users, particularly agricultural and horticultural users and in-river users. The provisions, through allocating water to a number of activities, recognises both the local and national net benefits associated with different activities and uses as well as beneficial and adverse effects on the environment.

High

Overall effectiveness

High

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