The future of an agreement under which Meridian Energy Ltd agreed to supply water to irrigate up to 25,000ha in the Mackenzie Basin is now uncertain under Government proposals to overhaul the electricity industry.
Meridian agreed in 2005 to provide up to 150 million cubic metres of water a year through the Mackenzie Irrigation Company.
Individual farmers could apply to Environment Canterbury (ECan) for water for irrigation above the Waitaki dam.
That agreement was between both companies, but now the Government proposes, under legislation tabled in Parliament yesterday to make Meridian hand over the Tekapo A and B power stations and the Tekapo canal to Genesis Energy.
Yesterday, all three companies were uncertain about the future of the agreement, which could affect plans for major irrigation in the Mackenzie Basin.
Some farmers are already involved in an ECan resource consents hearing to use some of that water under the Meridian agreement, including taking it from the Tekapo catchment.
The agreement with Meridian followed years of dispute between the Government, the power company and Mackenzie Basin farmers and community leaders over what happened to water for irrigation originally provided when the upper Waitaki power scheme was built.
That was aggravated in 2004 when the High Court ruled that Meridian, under its hydro generation resource consents, had access to all the water above the Waitaki dam.
In 2005, after negotiations, Meridian agreed to supply water to the Mackenzie Irrigation company.
The Mackenzie Irrigation Company's chairman of directors, Dunedin accountant and businessman Murray Valentine, yesterday expected that agreement to be honoured and continue if Genesis owned the two Tekapo power stations, and warned that neither Genesis nor Meridian should want to pick a fight with his company.
Meridian Energy spokesman Alan Seay and Genesis spokesman Richard Gordon said the agreement was one of the practicalities that had to be worked through if the power stations changed hands.
Mr Valentine said his company had not seen the details, but "normal principles of law" said people's rights could not be taken away without compensation.
"If Meridian hasn't provided adequately for us in the transfer of those assets to Genesis then we will be seeking the appropriate compensation."
Mr Valentine said it was "almost impossible" to contemplate the agreement would not be dealt with.
Mackenzie Irrigation would be watching what happened and, if necessary, would make a submission to the select committee which would consider the legislation.
Mr Gordon said Genesis still had to consider in detail the Government's proposal and analyse what it meant for its business.
Mr Gordon said it could take up to a year for Parliament to enact the legislation.
david.bruce@odt.co.nz