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Federated Farmers is concerned having two competing electricity generators operating power stations on the Waitaki River could affect irrigation in North Otago and South Canterbury.
The national farmers' organisation does not oppose, but is cautious about, a plan by the Government to force its state-owned enterprise, Meridian Energy, to sell the Tekapo A and B power stations and canal to another SOE, Genesis Energy.
On Wednesday, Federated Farmers made a submission to Parliament's finance and expenditure select committee on the Electricity Industry Bill, which includes the proposal for Genesis to own the two power stations at the start of the Waitaki River hydro-electric generation system in a bid to improve South Island electricity industry competition.
Federated Farmers chief executive Conor English said irrigation had become particularly important in North Otago and South Canterbury, both in terms of improving productivity and as a means of drought insurance.
"A particular concern ... is the implication for downstream users from having two competing generators operating in the upper catchment where most of the river's water is stored," he said.
Federated Farmers considered it "very important" that the terms of the Waitaki catchment water allocation regional plan's minimum flows, prepared by a Government-appointed board in 2005, formed the basis of any water management agreement between Meridian and Genesis to ensure reliability of irrigation supply and it wanted that included in the Bill.
Federated Farmers wanted further work done on the costs and benefits.
"While we do not necessarily oppose the sale of Meridian's Tekapo A and B stations to Genesis, it is unclear to us whether this further work has happened," Mr English said.
Federated Farmers also asked for the Bill to ensure Transpower took account of landowner issues in relation to its transmission system.
"Transmission lines can't be built from the sky, so it isn't helpful if landowner issues are ignored. As we have seen with Maori treaty issues, sweeping grievances under the carpet only builds tension.
"Keeping the lights on and power prices competitive are key objectives . . . but they must not trample over the property rights of landowners or on industry transparency," he said.