Hamilton residents will face a hike in water rates of 4.25 per cent starting January 1.

The increase means a typical annual bill of $578 would increase by $24 to $602.

While the increase is notable, city officials said the rise in rates over the years has been mitigated by more efficient household appliances and the conservation efforts of homeowners.

Since 2007, rates per cubic metre of water have increased from 91 cents to $1.17 — a rise of 29 per cent. But according to the publics works department, the average annual bill increased from $513 per home in 2007 to $573 per home in 2012 — an increase of only 12 per cent.

"That’s over five years, which is about two per cent [increase in the rate] a year. I think that should give us comfort," councillor Llyod Ferguson said.

"While 4.25 per cent looks like a high number, because of technical advances — rain barrels, showers, toilets  —  plus the consumer being aware, it actually is around 2 per cent, which is more palatable."

While the city did not have a number for the cost to residents of upgrading appliances to more efficient models, John Savoia, senior city financial policy adviser, said most people have simply been replacing aging appliances as needed. This has contributed to the lower overall water bills.

"Whatever you buy now is going to be way more water efficient," he said.

"Whether they’re remodelling or basically it’s not working any more, they go replace it. Clothes washer, dishwasher, it doesn’t matter what it is, they’re way more water efficient."

Savoia also pointed to the introduction of water meters as a cause for higher conservation by residents. They've helped  draw attention to leaks or dripping faucets, motivating residents to get these problems fixed.

Room for more conservation

Despite the conservation efforts, the average annual household water bill in Hamilton exceeds those of some neighbouring municipalities. Torontonians pay an average $30 less per year than Hamiltonians, and residents of Peel pay a whopping $215 less per year.

Still, Hamilton has some of the lowest water rates in the province, with the average yearly rate across Ontario more than $200 higher than in Steeltown.

Looking ahead, the city is hoping to do upgrades to the waste water treatment plant on Woodward Ave. with two separate projects beginning in 2017. It has applied for a $200 million grant from the federal and provincial governments to clean up the harbour and rehabilitate the plant, followed by an expansion.

The price tag for the rehabilitation project is $330 million. The federal government would pay $100 million, the province would pay $100 million and the city would pay the balance of $130 million, Rob Rossini, manager of finance, explained. He added the city’s portion would be paid out of the rate budget, rather than taxpayer money.

The project would have had to be pushed through sooner and at a higher cost to the city if conservation efforts had not reduced the amount of water being processed at the plant, buying the city more time, according to Savoia.

"This has only been possible because of the conservation of the community, both residential and industrial" he said. "We were reaching what we thought was going to be capacity."

As well, the city’s contract to deliver water to Haldimand is up for renewal in 2014. The 20 year agreement is likely to be renewed, Rossini said.

"They’re still going to need the water," he said. "We’ve got the water. They’ve got the need. That’s a good thing."