Upgrade some supplies so that they can avoid chlorination

Option 2 means we would need to improve some of our water infrastructure to ensure we can meet national water quality standards without relying on chlorine treatment. This approach is taken in countries like Holland, Switzerland, Germany, Austria and Denmark.

However, even with more investment there’s still a possibility that we would be required to chlorinate, to meet the regulatory requirements set by the Government’s new water services regulatory body Taumata Arowai.

Supplies that are already chlorinated (such as surface water sources) are likely to remain chlorinated.

We would not pursue the more expensive Option 2 unless there was strong public support for this, including willingness to pay for increased capital and operational spending.

Cost

We would need to spend at least an extra $30 million over the period 2021/22 to 2023/24 on water infrastructure to possibly avoid chlorination of some supplies. This would fund infrastructure such as inline UV treatment, new secure groundwater sources, leakage reduction in the reticulation network and upgrades of reservoirs.

There would also be additional operating costs associated with this additional infrastructure, estimated at around $200,000 per year.

Impact on rates

The increase in water rates for water infrastructure to possibly avoid chlorination (base rate and volumetric rate) for a typical residential property would be around 20%, or about $100 a year, assuming the debt is repaid over 20 years.

For a ratepayer with water units the increase would be about $56 plus $44 per water unit per year.

The increase would only be applied to properties that currently don’t have a chlorinated water supply and which remain unchlorinated.

Impact on debt

We would need to borrow an extra $30 million, which would be repaid through water rates.