Aaah. This is interesting. I've seen such claims before and have responded to them as part of my previous government job. Also had some apparently related claims involving finding certain elements via dowsing.
So far as I know, no one has provided any credible scientific basis for these claims. I have seen some attempts to credit the detection of magnetic fields or magnetic fluxes, but the mathematics never seemed to work out properly. I have also seen attempts to explain dowsing via quantum-level fluctuations of local fields (of various sorts), but those attempts also broke down in the details.
This does not mean that I would feel comfortable discrediting folks who have used dowsing techniques over the years. Rather, there is no scientific consensus that these methods work, let alone HOW they work. I suspect something may well be happening -- and that something may not have anything to do with the dowsing rods themselves (certainly, no theories based on responses within the rods themselves have ever come close to working out).
Consider instead that many birds navigate by means of the earth's magnetic field. The details of their methods currently escape us, but enough evidence has been gathered over many decades ... plus careful measurements of the brains of various avians ... to lead scientists to conclude that the brains of migrating birds can respond to the amplitude and direction of the earth's magnetic field. One day, I'm sure we'll know much more about the details of bird's methods and how those methods connect to a bird's anatomy. This is mere supposition on my part, but perhaps the brains of certain humans are also sensitive to local variations in magnetic fields. This sensitivity may be very minute and might well need training, ritual, even belief to make it useful. I would conjecture that we connect the ritual of "dowsing" to this sensitivity, and thus certain people might be able to detect underground power lines or perhaps even moving sources of water in this way.
Please be aware that this is merely conjecture on my part, unconnected to a proper theory with appropriate mathematics and a detailed physical mechanism. It is pure speculation ... and speculation can be fun.
Of course, YMMV.