Salmon farm fears impact of hydro changes

Salmon farming in high country hydroelectricity canals may suffer collateral damage from the Government's re-allocation of electricity generation resources, one of the farmers said today. "It is entirely conceivable that there will be prolonged periods of no flow, which would be extremely detrimental to the farm," Mt Cook Alpine Salmon general manager Rick Ramsay said today.

Salmon farming in high country hydroelectricity canals may suffer collateral damage from the Government's re-allocation of electricity generation resources, one of the farmers said today.

"It is entirely conceivable that there will be prolonged periods of no flow, which would be extremely detrimental to the farm," Mt Cook Alpine Salmon general manager Rick Ramsay said today.

Energy Minister Gerry Brownlee's proposed re-jig of the electricity sector -- now before Parliament as the Electricity Industry Bill -- requires Meridian Energy to hand over the Tekapo A and B power stations to a rival state-owned company, Genesis Energy.

This was equivalent to giving one company the tap that controlled its rival's access to the energy source. Meridian's control of over 50 percent of the nation's hydro storage would become dependent on Genesis.

The Tekapo stations effectively control water flows down the Waitaki River, to Meridian's remaining six hydro stations downstream. Critics of the bill have previously warned the river's flow can be timed to affect wholesale electricity prices, and that there was potential for Genesis to "game" the release of water to the Meridian stations.

Today Mr Ramsay said the temptation of being able to manipulate power prices and at the same time cripple a competitor by draining Lake Tekapo in early winter "may prove to be too much for even the most social-minded of profit-making enterprises".

The economic incentives involved could lead to deliberate mismanagement of the catchment, but if one operator took 25 percent of the storage out of play, it would be disastrous for the salmon company's farm.

By next year Mt Cook Alpine Salmon plans to be farming its fish in all three of the Tekapo, Ohau and Ohau B canals which connect the headwaters of the Waitaki River system.

It is also constructing a hatchery and a tourist centre with a restaurant, and has said the farm will be the nation's third largest salmon operation earning more that $60 million from exports and employing nearly twice as many workers as the region's electricity generators.

Mr Ramsay told Parliament's finance and expenditure select committee that his company felt that rather than improving competition, Mr Brownlee's changes actually signalled that the retail market did not work independently of generators.

"This is another ideologically driven piece of tinkering with a very efficient hydro chain," he told NZPA.

The best outcome would be if the Government left the hydro stations with Meridian, with the catchment under one management, and found another way to improve the way the market functioned.

The salmon farm would have to live with whatever the Government chose, but the present plan posed a risk to aquaculture in the canals.