Should Taranaki Abattoir cease using council water, an average property connected to the Stratford District Council's water supply will be charged an estimated extra $10 per year.
Abattoir owner Terry Lester is threatening to do just that should council not reconsider the steep increase to $1.28 (GST excl) for usage over and above the 250cu m allowance - up from $0.71c per cu m for commercial users over the past two years.
"I am pretty upset that they presented their figures and pretty much said take it or leave it. I do not know how they came up with their cost when we can produce water for $0.30 per cubic metre," he told the Stratford Press after speaking in the public forum at the council meeting last Tuesday.
"What I am saying is, compromise."
He estimates that, should he erect his own water treatment plant to withdraw water from the river adjacent to the plant in Stratford, the saving on water would pay for the infrastructure within four years.
"The model that we presented to council was a very simple payback model that did not factor in cost of capital and the return achieved was less than four years.
Given this very short payback achieved, any factoring of the capital costs will not change the model very much at all, especially given the current cost of capital.
"After allowing for cost of capital, after five years we are better off by an estimated $36,000."
Terry adds they might have to go through some hoops to withdraw the amount of water needed, but as he has withdrawal rights he believes it is attainable.
His total bill on average following the increase will be around $42,000 per year, which he says might well strangle the business, one of only a small number of independent abattoirs left in New Zealand.
"We are the council's biggest water user. I can take it or leave it. At $1.28 I will not be there, then the other users will need to take up the slack."
Mayor Neil Volzke says part of what Terry requested last year was adhered to, with council now also being 'charged' for the water it uses to even out the price over all users. Terry welcomed this development, saying they expect to "see a drop in the water cost as a result (diluted, I suggest you could say)".
Neil says while not all commercial users are metered, this year the council started a programme that will see all new residential, commercial users and properties over 2000sq m metered by 2020. He asked for some number crunching on Terry's presentation, to be discussed at the council's next policy and services meeting.
Council director of assets Sven Hanne says the abattoir is a higher individual consumer, but still only uses a small percentage of the overall water council treats - around 2.5 per cent.
"While we still have to do the exact figures, the abattoir withdrawing would not just be a reduction in revenue but also a reduction in cost, as it would reduce the overall amount we treat. My current estimate is that the financial impact would be less than a two per cent increase in council's targeted water rate."
He adds that, as council does not make a profit from providing water but recovers the cost, the impact of a customer sourcing water from an alternative is rather small. "If we reduce what we charge the abbattoir, the price for other users will also go up as someone has to pay for the cost."
