Source: Radio New Zealand
Some households are facing new, higher water bills in the coming financial year as a shake-up to water services gets underway.
Councils are investing nearly $48 billion dollars over the next decade in an effort to upgrade old, failing infrastructure under the Local Water Done Well model.
New water entities in Waikato, Wellington and the Selwyn District are among the first to establish entities under the new system.
Water services, charges for ‘rapid’ growth in Waikato
Water charges were set to jump by $174 in Hamilton and Waikato district this coming financial year, and residents would pay a separate water charge to the new organisation from July.
But both areas had projected significant increases in charges beyond that, with Hamilton City Council forecasting bills would increase by 28 percent and Waikato District Council by 14 percent over the next decade.
Iawai is the region’s new water entity, which will deliver drinking water, wastewater and stormwater services from 1 July.
Its chief executive Peter Winder said the organisation had a major challenge in both renewing degrading water assets, and investing in infrastructure for the growing region.
Iawai chief executive Peter Winder. Supplied/ Te Pūkenga
The population of both Hamilton and Waikato district was set to increase by about 50,000 people in the next 10 years, Winder said.
“That is quite rapid – and will require significant investment in treatment plant capacity for both water and wastewater across the district.”
The organisation was proposing an extra growth charge on drinking water and wastewater supply for new builds of $500 in total – $200 per year for 25 years for drinking water, and $300 per year for 25 years for wastewater.
Winder said significant business investment in north Waikato could not proceed until water infrastructure in the area caught up.
Winder said years of under-investment in water treatment plants and pipes could no longer be ignored.
“Addressing that problem will require price increases, so there’s a squeeze coming across the whole of the country.”
‘Balancing act’: New water boss in the capital weighs failing assets with affordability
In Wellington, raw sewage was still being spewed into Cook Strait every day, about two and a half months’ on from the Moa Point disaster.
New Tiaki Wai chief executive Michael Brewster said weighing much-needed investment with affordability concerns was a tight “balancing act”.
Tiaki Wai chief executive Michael Brewster. RNZ
He said it would take at least 10 years for renewals and upgrades to start working – when the city would see fewer leaks, pipe bursts and sewage spills.
“[It’s getting to the point where] You’re actually consistently investing enough so you’re maintaining the network, so you don’t have this issue we have right now which is, do we push it all down the road and wait for the next generation to pay, it’ll just get worse, how much can we afford to do now?”
Tiaki Wai had recently forecast bills increasing by about 14 percent for this coming financial year, and reaching about $6800 per year by 2036 for some households.
The Commerce Commission said it was scrutinising the entity’s financial model.
Brewster said improvements were possible, but when asked whether they could be done in an affordable way, he answered: “It depends on how to define affordable, affordable is in the eyes of the customers at the end of the day, so difficult for me to say what’s affordable being a new person. It’s certainly achievable if the money’s there, if the funds are there.”
Brewster said he led Tasmania through major drinking water problems from 2013 – under a large amalgamation of 29 council services into TasWater.
“At our peak I think we had 29 towns in Tasmania that couldn’t drink the water … either had to boil it or couldn’t drink it. So we addressed all of those over a two and a half year period.”
He had visited the main water treatment plants in the Wellington region, including Seaview and Porirua, which also faced significant issues and needed close attention.
Years of experience had shown him that people deeply cared about water services – when they did not work.
“Most of the time customers don’t sit out there and think about the water business – they’re usually ambivalent to the whole thing, but when you don’t get it right, immediate outrage.
“So understanding what those outrage points are and understanding your job as a water business is to be responsive, be there when they need them, to show them there’s a way forward and improvement journey.”
In Wellington, raw sewage is still being spewed into Cook Strait every day, about two and a half months’ on from the Moa Point disaster. RNZ / Samuel Rillstone
Bills set to increase 18 percent in Selwyn
In Selwyn, water bills were proposed to increase by 18 percent in the coming financial year as the new council-controlled organisation, Selwyn Water, took over.
For households receiving both drinking water and wastewater services, the expected annual increase was $280.
Mayor Lydia Gliddon said the 18 percent rise was a decrease on the 24 percent initially projected.
She said the council had strict expectations around affordability.
“Affordability is front of mind for us. It is front of mind in our statement of expectation to Selwyn Water. And we’re expecting them to be finding as much efficiency as they can so services remain affordable for our people.”
Gliddon said Selwyn was a growth district and investment would be high, and the “pain” would be ensuring “growth paid for growth”.
Selwyn mayor Lydia Glddon. ANNA SAREGNT / RNZ
Selwyn Water chief executive Alex Cabrera said the company would release its full Water Services Strategy in May – and be consulting with the community then.
The immediate priority was ensuring water services were safe and reliable, Cabrera said.
“At the same time, we are building the foundations of a modern water utility and investing in infrastructure to support Selwyn’s growth, renew ageing assets, and strengthen resilience to future challenges such as climate change.”
Commerce Commission setting up water ‘league table’
Under Local Water Done Well, all councils must implement their water plans.
Legislation required councils to implement their Water Services Delivery Plans – including new service delivery arrangements, by 2028.
The Commerce Commission was regulating water organisations under the Local Water Done model, chair John Small said.
It was requiring new water companies to publicly report each year including on water costs, charges, and how well they responded to faults.
“It’ll be a bit like a league table in the sense that everyone will be able to look at this and say ‘how’s my company doing relative to others? Are they hopelessly inadequate, or are they one of the leaders of the pack.’”
He said the commission may have the ability to intervene in pricing, but that needed approval from government.
Small said the commission could only look at whether a company was over-charging relative to its costs, not whether bills were unaffordable.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
