Water Services Delivery Plans
a critical opportunity for meeting regulatory objectives through integrating climate change action
November 2024
Purpose
Climate impacts, mitigation, transition andadaptation presents one of the greatest risks and costs to water services delivery and financial sustainability. This document provides Councils with guidance for completing their Water Service Delivery Plans so that they can adequately consider climate change risks when establishing how they will ensure financial sustainability and meeting the regulatory economic, environmental and quality standards.
Background
The overarching purpose of the water services delivery plans (WSDP) is for Councils – individually or jointly – to demonstrate their ability to deliver water services in ways that are financially sustainable, meet regulatory standards for network and quality by 30 June 2028. The Plan must contain a description of any issues, constraints, and risks that impact on delivering water services.
Climate change impacts pose the biggest financial and quality risks to water services delivery in the coming years. Having these risks and implications identified, considered and assessed in the delivery plans for water service entities is critical for WSDP’s relevance and efficacy.
The vulnerability of water services, as become apparent with the recent flooding events in Aotearoa. These hazards and risks will likely intensify and increase in the future. The National Adaptation Plan recognises financial decisions as a key avenue to respond to climate change and build a resilient economy.
This guide provides an outline how to:
1. Integrating climate risks into WSDP so the true financial impact of climate change is part of the financial sustainability equation.
2. Provide an overview for any regulator or auditor to effectively measure the water entities plans and performance against the financial and service delivery risks posed by climate change.
Approach
The Local Government (Water Services Preliminary Arrangements) Act 2024 clause 11 and Department of Internal Affairs Water Service Delivery Plan (WSDP) template headers are used to focus where a councils climate risks are included in a WSDP.
Note that not all clauses of the Act are covered below; only those that are relevant to addressing climate change.
Clause 11 lists the information that a water services delivery plan must contain.
(a) description of the current state of the water services network:
Relevant DIA WSDP template pages (refer to sections highlighted green in appendix 1)
Part B Network performance
Page 7: Service areas
Current levels of service and performance
Territorial Authority response would contain:
(b) a description of the current levels of water services -and performanceprovided:
Part B Network performance
Page 7: Investment to meet levels of service, regulatory standards and growth needs
(c) a description of (d) whether and to what extent water services comply with regulatory requirements:
(e) details of the capital and operational expenditure required to deliver the water services; and ensure that water services comply with regulatory requirements:
Part B Network performance
1. Levels of service and performance relating to drought.
2. Water services infrastructure at risk of climate change impacts associated with providing growth.
3. Performance against greenhouse gas reduction targets as a performance measure.
1. Description of the impacts on levels of service from climate related risks (e.g. drought preparedness, flood protection and emergency levels of service post hazard event in place).
2. Performance against greenhouse gas reduction targets.
Page 9 – Statement of regulatory compliance Regulations include:
Part B Network performance
Page 11- Capital expenditure required to deliver water services and ensure that water services comply with regulatory requirements
Councils are encouraged to comment in how proposed investment leads to an uplift in level of service and benefits communities.
1. Taumata Arowai drinking water quality;
2. Risk plans and National Environmental Performance Report;
3. Air, land and water (take and discharge) resource consents.
Ensure capital expenditure includes:
1. Significant capital investments that create better resilience to flooding, drought and sea level rise. Eg drought resilient water supply, leakage reductions, network assets, sea level rise protection or relocation.
2. Assets that reduce sludge volumes and/or improves reuse (e.g. biosolids management, dewatering, digestion, thermal hydrolysis, gasification plant, vermiculture, etc.);
3. Assets that reduce or allow to reduce wastewater emissions (e.g. N2O and CH4 monitoring equipment, MABR plants, biogas reuse or flaring, nitrogen control plants);
4. Assets that reduce energy consumption or produce energy (e.g. biogas engines,
(f) financial projections for delivering water services over the period covered by the plan, including (i) the operating costs and revenue required to deliver water services; (ii) projected capital expenditure on water infrastructure; and (iii) projected borrowing to deliver water services:
Part C: Revenue and financing arrangements
Page 14 Funding and financing
Part D: Financial sustainability assessment
Page 15 Risks and constraints to achieving financial sustainability
Part E: Projected financial statements for water services
Page 23 Projected funding impact statement
Page 24 Projected statement of comprehensive revenue and expense
electric vehicle fleet, energy efficient motors and plant, instrumentation to monitor and manage energy use, solar power).
5. Embodied and/or whole of life GHG measurement.
6. Professional services that ensure effective long-term transition, adaptation and resilience considerations;
7. Network and water supply modelling that supports climate change considerations whilst meeting regulatory requirements and providing for growth.
Projected borrowing should include:
1. Proportion of debt that could be considered for green financing (Eg green and social loans or climate action loans through LGFA).
Unexpected costs from extreme weather events as a risk to financial sustainability:
1. Commentary on recent extreme weather events in New Zealand that have led to significant unexpected costs to Councils and in particular water service areas (eg Cyclone Gabriel, Auckland Drought)
Operating costs and revenue should include:
1. Emergency management across 4 R’s (reduction, readiness, response, recovery) and increasing over time;
2. Business continuity planning
3. Unplanned maintenance due to extreme weather events increasing over time;
4. Environmental and quality monitoring –and that required by consents;
5. Greenhouse gas measurement;
6. Professional services for climate change risk and impacts.
(g) an assessment of the current condition, lifespan, and value of the water services network:
Part B Network performance
Page 8 - Assessment of the current condition and lifespan of the water services network
Network condition should include:
1. Life span based on previous operating conditions and different climate change scenarios;
2. Analysis of number/km of network impacted under different climate change
(h) a description of the asset management approach being used, including capital, maintenance, and operational programmes for delivering water services:
Page 9 – Asset management approach
(i) a description of any issues, constraints, and risks that impact on delivering water services:
Water Services Delivery Plans additional information
Page 28 Risks and assumptions
scenarios (e.g. 0.5m, 1m, 2m sea level rise);
3. Differentiation of network assets by material type.
The asset management approach would include climate risk by outlining:
1. Appropriate consideration given to is renewal the best future proofed approach.
2. Adequate investment in renewals;
3. Predictive maintenance approaches in areas prone to extreme weather events;
4. A whole of life cycle asset approach;
5. Data driven decision making with a utilisation of climate change scenarios to supplement historic data;
6. Key performance indicators that reflect climate change impacts (e.g. proportion of assets at risk of sea level rise);
7. A climate change risk section;
8. Develop and implement comprehensive drinking water demand management plans to identify and mitigate water security risks;
9. Alignment with a Council’s goals to reduce greenhouse gas emissions;
10. Use of DAPP or similar adaptive tools in decision making.
Risks should include climate change risks such as (from the National Climate Change Risk Assessment):
1. Risks to potable water supply (availability and quantity) due to changes in rainfall, temperature, drought, extreme weather events and ongoing sea level rise;
2. Risks to wastewater and stormwater systems, and their related environmental discharges (and levels of service) due to extreme weather events and ongoing sea level rise;
3. Risk to physical health from exposure to storm events, heatwaves, vector borne diseases, and water availability due to extreme weather events and ongoing sea level rise;
(j) the anticipated or proposed model or arrangements for delivering water services (including whether the territorial authority is likely to enter into WSCCO or joint arrangement.
4. Risk that climate change risk impacts are exacerbated because institutional arrangements are not fit for climate change adaptation and mitigation.
5. Mental health of community and staff.
Impacts on levels of service from specific climate risks including water security and water connection.
Issues could include:
1. A lack of resources and maturity in understanding greenhouse gas emissions and strategies to meet Net Zero as per Government and Council targets;
2. A lack of resources and data in understanding climate change scenarios and their impacts on water service delivery;
3. A lack of specific climate change plans, resources and expertise that can be utilised by the Water Service Entity, as this was previously done by Council staff;
4. A lack of integration of land use planning decisions with existing knowledge of water infrastructure constraints and issues.
5. Zero Carbon Act 5ZW provides minister with the powers to ask Water Service Entities for information on climate change adaptation which would currently not be available due to lack of resource.
Include the impacts of climate change targets that would be required depending on the ownership structure of the water service provider.