Charging for water in the future
Under the Local Water Done Well legislation, an economic regulator will monitor the pricing of water under any option. The legislation asks us to explain to you how water can be funded in different ways. Under the options it will be up to either Council or a new water organisation to determine how to do this in the future.
Fixed water charges
This is what we do currently in Palmerston North.
Residents connected to our water and wastewater networks pay a fixed rate each year for each service. Everyone in the city pays a proportional amount for stormwater management, determined on their land value.
Some people don’t think this is the best or a fair way to manage water, as some homes use very little water but pay the same as those who use large amounts of water and may have things like outdoor irrigation, pools etc.
These charges pay the day-to-day costs of getting you water, treatment and discharge of wastewater, and replacing some assets.
Water meters
Many Councils are introducing water meters.
Kāpiti Coast District Council uses water meters, and so do some communities in Horowhenua. Palmerston North uses water meters for our commercial water users. Water meters are connected to each property and measure the volume of water used. That then determines how much a property pays for water.
When Kāpiti Coast introduced meters there was a significant reduction in water use, and it also helped locate leaks.
Some people view meters as a fairer option as you only pay for what you use, and so are incentivised to use less water. It also means people with pools or irrigation systems pay for those large volumes of water. However, some have concerns about the impact on large families or people who use more water for health reasons.
If councils collaborate to create a water services organisation there will need to be conversations about how water is charged to ensure it is consistent. This could also be a conversation during any transition set-up. We suspect that at some point in the near future, water meters will be likely.
The legislation requires that any organisation adopts pricing structures that reflect the cost of the services, while promoting equitable access to water. All revenue must be reinvested. This is to avoid excessive charging.
Under all options, the legislation allows for charging people connected to the drinking water and wastewater networks, as they are now. We would also expect that all properties (regardless of if they’re connected to the water supply) would continue to contribute towards the cost of stormwater management. The legislation requires that the costs for each are itemised, as they are now. It also allows for charges to be applied to properties not connected to the network but within the service area, to reflect the cost of maintaining the service.
We expect that commercial water users and our trade waste (wastewater) customers will also continue to pay for their water. Any new water organisation would look at how this works across the wider region to ensure it’s consistent.
Currently, your water costs are charged as part of your rates. Under Option 1 or 2, we expect that in time you would receive a separate invoice from the water organisation. This would be like your power, phone and internet bills, where you may receive an invoice monthly or quarterly. You’d also talk to that organisation directly for any concerns or feedback about water or bill payments. The legislation allows for late fees for unpaid charges.