Up to $333-a-month water bill coming down the Wellington pipeline

Monday, 21 October 2024

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The water bill you may not even know exists is forecast to increase by 9% per year, meaning each Wellington region household may be getting a standalone monthly rates bill of more than $300 within about a decade.

Greater Wellington Regional councillor Ros Connelly said the region’s households paid an average of $1711a year for three waters – tap, waste and storm – via rates but 50 or more years of underinvestment had left the region in a parlous state. A proposed new regional entity, given government powers to borrow more to fix and replace pipes, would charge per-household for water usage.

That would be capped at $3000 to $4000 a year, for each household including renters. $4000 a year equates to $333 per month. The region’s water infrastructure was in such a poor state we were approaching “network fault runaway” – when more was being spent on fixes than the cost of replacing, she said.

“We are spending all our money plugging holes,” she said. The situation was necessitated by the National-led government scrapping the last Labour government’s three waters policy and replacing it with Local Water Done Well.

The state of the region’s pipes was brought into sharp relief last summer as a dry season mixed with under-investment, ledto water restrictions and a close-call with water outages. Wellington Water, which is likely to be replaced with a new entity, said $30 billion was needed over 30 years to fix pipes across Wairarapa, Wellington City, Porirua and Hutt Valley.

Just last week a burst pipe sent water gushing down Vivian St in central Wellington, while residents near the Seaview Waste Treatment Plant in Lower Hutt have been reporting an even-worsening stench.

Dame Kerry Prendergast, the former Wellington Mayor leading an advisory group looking at a shared water entity for up to 10 lower North Island councils, said water bills could be expected to increase by roughly 9% each year in future years.

Councils could not increase water funding for the three years starting from September 2025 more than budgeted in long-term plans. The predicted 9% compounding increases on a standalone water bill would come in after that.

That meant no extra money, on top of what was already budgeted for in council plans, could go into pipes in the coming three years. Dame Kerry confirmed that some water assets were at risk of “catastrophic asset failure” in the meantime.

“No [council] in the region has enough in their long-term plans,” she said.

Three waters are currently funded by councils as part of rates bills. The new entity would charge households separately. This means rates bills should theoretically go down but Dame Kerry warned the new water bill would outstretch that reduction.

She said the amount needed to play “catch-up” and build for growth exceeded the planned rates increases in all council long-term plans.

Compounding costs – where the base that is being added to increases each year, making each percentage worth more in real money – has been shown in Wellington City rates to increase a rates bill of $4000 from earlier in 2024 to more than $11,000 within a decade. Dame Kerry confirmed the same compounding factor, albeit with different percentage increases, was proposed for water.

Under the current proposal, one water entity would serve 10 councils in the lower North Island but each council needed to consult communities on options and come up with a preference by September 2025. Whatever model chosen – for example going-alone of merging with multiple councils – had to be shown to be financially sustainable and signed off by government, Dame Kerry said.

The figures come from an October report into regional water delivery which says the cost should return to a 'sustainable' figure of $2596 a year when catch-up work is done – in about 20 years. Financing arrangements may be able to ease the worst of the peak, it says.

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