Green light for plan to take extra water from Lake Pūkaki for 3 years

A Meridian Energy proposal to temporarily take more water from Lake Pūkaki for hydro power has been given draft approval by a fast-track panel.

The controversial proposal will allow Meridian to draw down the lake level an extra five metres over a three-year period, without needing special approval from Transpower.

It was opposed by Transpower, Genesis and - at a late stage - Energy Minister Simeon Brown, who all argued it could create risks in a dry year if Meridian had already drawn down the additional water.

However, Meridian said being able to access its contingency storage more easily would lower wholesale electricity prices and allow it to plan generation more efficiently.

It has previously said it was unlikely to ever use the full contingency, but every extra metre of available water would ease the pressure on energy generation during dry winters.

Modelling in the fast-track referral documents showed the proposal could release enough energy to power 75,000 homes and reduce wholesale electricity prices by about seven percent, by removing uncertainty over when Meridian could tap into its backup water storage.

The draft decision comes despite Brown asking the panel last month to turn Meridian's proposal down, arguing that it would weaken, rather than strengthen, the country's dry-year energy security.

In a late comment provided to the panel, the minister said if Meridian was granted access to water currently held in reserve, "it would reduce the volume reserved for rare but critical periods of system stress".

The proposal attracted similar concerns from Genesis Energy, which told the panel the proposal would create "a nationally significant increase in system risk due to the loss of the contingent storage to the system".

Genesis was also concerned about knock-on effects on its Tekapō B power station, which is part of the wider Waitaki hydro system.

Transpower and the Electricity Authority were at odds, with Transpower opposing it for similar reasons to Genesis and Brown.

The Electricity Authority, however, said it would result in more competition and therefore, cheaper prices for consumers.

It believed the proposal would create more system reliability.

"Allowing Meridian the option to use Pūkaki contingent hydro more readily, means the system has more risk management options available."

Meridian chief executive Mike Roan said the gentailer respected and appreciated the views of those concerned about the effect on contingent storage.

"Given these concerns and the positive hydro storage outlook for winter 2026, we propose that, if the draft decision is confirmed, we will continue for the rest of 2026 to treat half of the five metres of contingent storage as only accessible when there is a heightened risk to security of supply."

The company planned to talk to other industry players about how that would work, Roan said.

A wide array of others invited to comment have raised environmental concerns about the proposal, including the Department of Conservation and Canterbury Regional Council.

Both organisations were particularly concerned about the effect on wetlands and the species they provide a habitat for if the lake levels were lowered.

The fringes of the lake are home to the black stilt (kakī), which is critically endangered in New Zealand.

Earl Bardsley, a hydrologist and associate professor at the University of Waikato, previously told RNZ the option to dip into the lake would cause up to a 20 percent reduction in the lake's size, exposing 35 square kilometres of lakebed.

The fast-track panel is required to release its final decision by 3 July.

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