Up to July, Wellington region’s residents pay on average about $2100 in water charges through their rates bills.
The charges are set to increase throughout the next decade to reach a forecast average of $6206 per year in 2036, instead of $6831 – a 10% decrease on initial projections.
Confusion, anger and concern has been mounting over the bills, as well as a projected half-a-billion dollar price tag for water meters.
Tiaki Wai has said it has a huge amount of work to do to turn around the region’s old, leaking and failing infrastructure – including four non-compliant wastewater treatment plants.
Chairman Will Peet said officials had listened to people’s concerns.
“I know some people will find these charges really, really difficult. I also know that there are very few people that look forward to getting an increase in prices.
Tiaki Wai chairman Will Peet says officials have listened to people’s concerns.
“We know we need to get on with the investment, and we know we need to get the support of the community, and it’s the balance of those two things we’ve worked hard to do.”
In explaining how reductions were made, Peet said Tiaki Wai decided to extend its capital spending programme – meaning it may take longer to reduce the frequency of leaks, pipe failures, flooding and overflows. He said decreasing bills would further delay improvements more.
The five shareholding councils – Wellington, Porirua, Upper Hutt and Lower Hutt, with Wellington Regional Council – had agreed to a financial backstop of $400 million, which could be used in a significant, unexpected event.
This reduced the need for Tiaki Wai to rapidly build financial headroom, Peet said.
Wellington Mayor Andrew Little said while Tiaki Wai had come back with a lower price trajectory, the costs were still significant by the 10th year.
“These prices are still going to put huge pressure on a lot [of] households. So the scrutiny remains, the pressure on Tiaki Wai to have pricing that is reasonable and realistic remains, and we will continue to advocate for that.”
Little said he would be advocating for the Commerce Commission to have price control over Tiaki Wai. The commission is consulting on more regulations for the entity, including potential performance requirements.
The five councils on Friday confirmed they would transfer assets and debt to the new water organisation.
All five councils have now formally agreed to transfer assets worth a total of about $9 billion and around $1.6b of debt to Tiaki Wai from July 1.
Earlier this week, Little raised concerns about a half-a-billion dollar price tag for a water meter rollout Tiaki Wai had suggested in March.
Initial projections released in a draft strategy were that implementing water meters could cost between $500m and $590m and take between five and seven years.
Tiaki Wai chief executive Michael Brewster says there appears to be a benefit to using smart meters rather than mechanical meters.
On Friday, Peet said water meters were a “significant decision” and Tiaki Wai would be talking with councils about the rollout.
He said Tiaki Wai had not committed to any numbers around meters as there was “still work to do”.
“The main point with water meters is nobody is getting a $4000 bill in their letterbox – anything that we do decide on will be done over time and through the charges.
“The meters themselves will still be subject to a business case and when that’s done, we will be back to talk to people.”
Tiaki Wai has been looking at smart meters. During a meeting of the five shareholding councils, chief executive Michael Brewster said there was a difference in cost to install smart meters versus basic meters.
He said there initially appears to be a benefit to smart meters as opposed to mechanical meters.
“All of this has to be tested through the next stage of the business case.
“Meters must show value for money benefits over the costs, and we need to be able to demonstrate it to everyone, so there’s a lot of work to be done and some of that will involve pilots and trials to prove up the costs, before we get too far.”
-RNZ