The Kapiti News reported on 17 June 2015 that lower water consumption following the advent of water metering "now means a pricing increase to recover the costs" of piped water supply. Considerable local scoffing ensued.

"What's this!?" a friend cried.  "Lower water usage should mean lower costs and lower prices.  You economists must be in cloud cuckoo land to support this water metering nonsense."

Well, I cheerfully pleaded guilty to supporting user pays – if the economics stacks up.

The Kapiti Coast District Council (KCDC) did indeed increase the fixed annual charge per connection from $188.50 to $190.00 (0.8%) and the charge per metre of water used from $0.95 to $0.99 (4.2%) from 1 July 2015.

KCDC’s latest Water Update newsletter assessed that this would add $11.50 (2.7%) to the annual charge for a representative family of 4 and $6.39 (1.9%) to the annual charge for a representative retired couple-assuming unchanged water use.

It also reported that average daily consumption in the region had dropped 26% from 590 to 437 litres per person per day between the years ended June 2013 and June 2015. (Charges for water meters took effect from 1 July 2014.)

However the water charges set on 1 July 2014 will have largely anticipated this decline as a matter of fiscal necessity. KCDC's earlier case for introducing water meters presciently postulated a 25% reduction in peak daily demand.

The Kapiti News article made no case that charges have to be higher this year because consumption will be lower. It is much more plausible that real costs are rising in part because capital spending has had to rise to deal with well-publicised supply problems.

Indeed, higher supply costs each year through to 2019 were projected under all the options for dealing with these water supply issues that were canvassed in a 2012 advisory group report for the KCDC. The cumulative cost increases were lowest for the chosen option–water meters and a scheme to recharge the Waikanae River with bore water.

Greater water usage forces earlier spending to expand system capacity. That is one reason why cost increases would have been greater for the non-metering options. Spending $8.3 million on metering has allowed an estimated $36 million of capital spending to be deferred.

In short, the Kapiti News article ignored what is not seen–how much higher charges would have had to be under the other options for addressing supply issues.