Water Meter Tariff Development

Overview

Customer metering is typically paired with the introduction of volumetric charging for water (or excess use). Perceptions of this resulting in inequity or creating a pathway to privatisation of water servicing have been behind community opposition to metering in the past. Developing a volumetric charging regime should therefore be guided by clear, transparent principles established in partnership with the community. This includes engaging with diverse community representatives to ensure the regime is equitable, affordable, and reflects shared water use and conservation values.

Core principles might include fairness, transparency, ease of understanding, essential use affordability, environmental sustainability, and cost recovery. Special attention should be given to balancing the needs of residential and commercial customers on the one hand and vulnerable households on the other, with provisions such as pricing tiers or hardship rebates[JF3] . By co-designing the charging framework with the community, councils can build trust, encourage responsible water use, and ensure that the system is socially sustainable and financially viable.

An example of a community lead tariff design process can be found on the Kapiti Coast where a the Charging Regime Advisory Group (CRAG) was tasked with developing a charging formula for water.  The CRAG evaluated how different tariff structures would affect different types of households and they ultimately  recommended that a tariff structure of 50% fixed charge and 50% variable charge, to meet the total cost of water supply, would provide the most fair and equitable outcomes for Kāpiti residents.

Below are charts comparing different water tariff structures by showing their indicative annual charges at different consumption levels (m³ per year).[JF4]