Keeping with the water theme, its time we talked about our water. Its critical to our ongoing growth as a city and for our general health and well being.
Recently our council raised the debate over water efficiency and suggested that the debate was whether we build new water storage facilities (eg, reservoirs, dams, etc) or introduce meters and water police.
Apparently we buy a lot of water, and we may have to buy a lot more as we grow. Current water stocks are reaching their limits. If water supply is not increased, then we will have to reduce our consumption (according to council by 14 litres per person per day by 2016).
The fact the debate is framed in terms of efficiency tends to suggest the council are already leaning towards controlling the demand side of the ledger (eg, reducing consumption through increasing prices) rather than looking at improving supply. And this is confirmed by the council’s statement that they are looking to stabilise total consumption. But there are other ways to increase supply, other than just building reservoirs and dams. Reducing leakage and waste is a very good way to improve water stocks, and appears to get very little attention from council.
At the end of the day the ratepayer still pays for whatever solution we decide to implement. This debate should really be about where we want to spend our money.
So what is our current water supply?
At present, council are buying about $12 million worth of water a year from Wellington Regional Council. That’s roughly 30 billion litres of water a year or 400,000 litres per household per year (based on roughly 75,000 households). That’s about $1 per 2,500 litres. Unfortunately, the average household figure is neither real nor accurate.
Real household consumption is not known. This is because council do not know precisely how much water they themselves consume (eg flushing hydrants, watering sports fields, filling and cleaning swimming public pools, street cleaning, fire service use, etc), or how much is consumed by industrial and commercial users (who are not on meters), or how much is lost in leakage from old or broken pipes. At best leakage is estimated to be roughly 10-14 litres per hour (roughly 90,000-120,000 litres of water per year). A precise figure is not known. It could be much larger.
Council estimated that non-commercial water consumption is roughly “350 litres per person per day” (or 127,750 litres per person per year) or roughly 330,000 litres per household per year, based on 75,000 households (containing an average 2.4 people, based on a population of 180,000 people). This rate of consumption costs us $132 per household per year. The household consumption figure would also suggest that commercial water consumption is roughly the equivalent of 70,000 litres per household per year. But because not all non-residential consumption is metered, we do not know?
How do we compare? Other NZ cities and international benchmarks suggest that consumption should be around 250 litres per person per day. Based on and average of 2.4 people per household that would be 220,000 litres per household per year. This rate of consumption would cost us $88 per household per year.
Comparing council estimates with other benchmarks there seems to be a big gap – and that gap is large. And I don’t think you can attribute it to just lawn sprinklers being used over summer. Water use over the last decade shows 26% is used in the summer (December-February), and 24% in the winter (June-August). A very small difference. These facts would indicate we are careful with our water use. Either the council’s estimation methodology is flawed or we are consuming 50% more water per person than anywhere else in the world. Forgive me if I think the council methodology appears flawed.
Why use meters?
If we are unable to increase water storage and supply, then we are going to have to reduce consumption. One way to do this is to influence consumption through price. A bit like electricity. The more expensive, the less you will consume. And to enable a pricing model you first have to be able to measure consumption. Hence meters. Meters are also generally considered to be a pre-requisite for any moves towards privatisation.
Generally, rates are based on a percentage of the value of your property. The more expensive the property, the more you pay. Water charges can be calculated 2 ways: fixed price or unit price.
Fixed prices do not change no matter how much you consume. Fixed prices can be based on an average price or property value. Unit prices are dependent on how much you consume. The unit price can be a fixed price (eg, $1 per 2,500 litres) or factor in the value of the property.
At present, council are using a fixed unit price that does not factor in the value of the property. This explains why the up-take of meters is dominated by high value properties with lower than average water consumption. If you are not already aware, meters are already available to residential ratepayers on a voluntary opt-in basis – although council have not publicised this very much. At present, 1200 properties are using water meters.
One other very important consideration needs to be taken into account when considering meters – the cost of installation and ongoing maintenance (eg, meter readers). While newer properties already have the correct pipes installed, the vast majority of Wellington’s households are old. It is estimated that installing new water meters to private residences will cost roughly $50-70 million. This cost will have to be recovered by council. Which means residents will not only be paying for the water they consume already, they’ll also have to pay for installation costs. This means we will be paying more money for the same amount of water we consume already. If you can’t afford to pay more, then you will have to consume less.
One wonders if it would be better to just invest the $70 million into increasing supply? Because at some point, we will have to increase supply – there is only so far we can go with water rationing when the population is growing. And what happens if it turns out residential consumers are not wasting water? The infrastructural cost of installing meters will have been a major waste of money that could have been better spent increasing water storage and supply.
Finally, how much water will meters save? Research suggests that a saving of roughly 5-10% is realistic. 10% of $132 is $13.20. In all likelihood people will just pay the extra money, rather than reduce consumption (assuming there is room to reduce consumption). Compare water to petrol. How much is petrol per litre? Did consumption drop away substantially as prices went up? No, consumption stayed pretty static. People needed to get to places. And people need to use water. All that happened is the oil companies made larger profits, and consumers had less money in their pockets. And those who could not afford petrol increases became more removed from our economy and community. Will the same thing happen with water metering?
What are the alternatives to residential metering?
We could meter all non-residential consumers. If we metered all council and commercial usage we might have a more accurate figure of water consumption. In fact if we metered all non-residential users, we would by default know how much is being consumed be residential households. And the advantage of metering all non-residential water consumers is that the costs of metering (the meter box and reading the meter) would be a deductible expense for businesses. Whereas it’s not deductible for residents.
Then there is the hidden water problem. How much water is lost in leaks in our ageing water pipes or from broken water pipes? Although, there have already been calculations, that suggest water leakage is already a major factor in Wellington’s water consumption (estimated at around 5-10%). One reason leakage is a more significant problem in Wellington is because its hilly terrain means water has to be pumped at higher pressures putting extra strain on pipes and joints. Lawn sprinkling is insignificant consumption in comparison to the amount of water lost broken and leaking from pipes.
Perhaps the Council need to spend more on infrastructure that works. Something this council has failed to address. Investing in fixing leakage could save a lot of waste. This area of council expenditure has been heavily under invested. With proper investment we could not only reduce water wastage, but we could increase our capacity and storage through larger mains piping. This investment also provides tax advantages, not available to residential taxpayers. Reducing leakage is one element of increasing supply. Remembering that “the vast bulk of the water costs relate to getting it to you, not how much you use”. Perhaps rather than installing meters, we should first fix our water pipes?
Another solution is to increase supply through more efficient use and management of water. For residential and commercial water consumers it might be improved toilet flush systems, sinks, or shower heads. For council it might be better irrigation systems and burst water main response times. Of course the cost\benefit of these options needs to be weighed against the cost of increasing storage and supply. It might be that it’s cheaper to build storage for another million litres of water, than pay for toilets that would save the equivalent of a million litres of water. Again, it makes sense to focus on the non-residential consumers first, as they are better positioned through the tax system to off-set the cost.
If the cost per litre of water for building reservoirs or implementing meters is the same, logic would suggest that we should increase storage capacity through building more reservoirs. After all, at some point there is a minimum amount of water we need to consume to survive. Reducing consumption can only go so far. The 2 main constraints on increasing storage capacity are: the availability of water (and I am not aware that is a problem, at least not in recent weeks), and the cost of construction (estimated to be roughly $150-170 million).
We also need to keep in mind that increasing storage capacity will ensure that we improve our risk management of droughts. At present our storage capacity provides for a 1 in 30 year drought. International best practice suggests that allowing for a 1 in 200 year drought is prudent. This would suggest we should be increasing our water stocks, not capping them.
So perhaps there is more to consider than just rushing towards meters and water police. Perhaps there are other solutions we should be exploring first.
It’s about having an informed debate about where we want to spend our money.
http://www.stuff.co.nz/national/3811459/Council-warns-Wellington-of-fines-by-water-police, http://www.stuff.co.nz/dominion-post/local/the-wellingtonian/2985490/Wellingtons-leaky-pipes-predicament, http://www.stuff.co.nz/dominion-post/local/hutt-news/3888495/Hutt-water-leakage-tackled, http://www.stuff.co.nz/dominion-post/local/hutt-news/3888598/Household-water-meter-trial-approved-for-Wellington-region, http://www.stuff.co.nz/dominion-post/local/the-wellingtonian/2323541/Councils-water-use-figures-discredited, http://www.stuff.co.nz/dominion-post/local/the-wellingtonian/2985461/Editorial-Lack-of-rigour-in-water-report, http://www.stuff.co.nz/dominion-post/local/the-wellingtonian/2721779/Capacitys-secret-pitch
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