Omakau's Steve Moynihan says there are problems with the planned trial of water meters in the Queenstown Lakes district.
It seems it won't be long before the pestilent water meter starts spreading in the Queenstown Lakes district (ODT, November 26-28).
A trial will start on April 1 next year (well-chosen) with the intention of helping the council to ''manage water demand more efficiently and cost-effectively''.
Once introduced, however, there is no stopping the beast.
In my experience, these trials are more driven by councils, councillors, and, apparently, the auditor-general's office, all seemingly high on agenda and low on economic understanding.
The trial will turn out to be the thin edge of the wedge.
There will be a cost-benefit analysis, we are told.
Again in my experience this is a complex business that requires predictions of impact on demand reduction, the timing and cost of future capital works, and the effects of different rating methods, all interrelated.
Information is often taken from studies in other areas which in turn recycle other studies, with most if not all being predictions and not post-metering data.
The analysis needs to take account of regional climate differences, local climate annual variations, and the longer-term response to the initial shock of metering after rebound has taken place.
It also needs to avoid the attitude that all high water usage is wastage. Water has a value to the user.
At the high end, thirsty people will pay more than $1 a litre of water from the supermarket ($1000 cubic metre).
At the low end, some will feel a loss if they decide to economise on lawn or garden watering.
Accordingly, the disbenefit of reducing consumption needs to be included as a cost to the user.
In addition, consideration has to be given to businesses that require high water use - for example those in hospitality - hitting these with unit rates that are far above the actual cost of producing water is not economic and does the region no favours.
A large proportion of supply costs are fixed overheads that will only increase with metering.
The variable cost to a council of treating and pumping an extra cubic metre of water is often less than 20c, whereas some councils bundle fixed and variable costs together and charge more than $1 per cubic metre.
The use of a high unit charge is meant to frighten the user into cutting down on water use, but the saving is illusory.
If the council's cost is reducing by only 20c for every cubic metre you save, they can't afford to let you get away with any more than a saving of 20c or the books won't balance.
Therefore the charge is pushed up so that you pay more for the remainder that you do use - leaving you patting yourself on the back for saving more than a dollar on each cubic metre drop in use, but paying a hidden 80c more on the total you do use.
One benefit of the trial will be the identification and remedy of leakage.
This will be a good outcome, but remember that the cost of water supply in the district has already gone up by more than a quarter of a million dollars from the trial.
Another benefit is the fact costs will be allocated more fairly between high and low water users.
However, if full metering goes ahead each household will have to pay the $550 for a meter as well as the annual costs of meter readers and billing, and even low users may struggle to be better off.
A further benefit of lower water demand is the possible postponement of future supply expansion costs, but even this can be overstated when considering the need to cater for peak summer use.
A trial of one year is not sufficient to cover the price and seasonal elasticity of water demand in Queenstown Lakes.
It would be much better to spend a fraction of the trial cost on examining the outcome of the metering in Central Otago that has been in place for a number of years.
Then it is hoped that the report on the Queenstown Lakes proposal is comprehensive and explicit in its assumptions, and is made public before the district is committed.
Finally, it is hoped councillors then follow the most economic option, and don't dabble on the basis of their own preferences.
Steve Moynihan is a civil engineer from Omakau, specialising in project economic evaluation and coastal engineering.
