Auckland's water provider Watercare is warning water rates may need to increase by as much as 25 percent to run the business, while keeping to the council's borrowing limit.

Water charges increased by 9.5 percent last July, while infrastructure growth charges rose by 8 percent.

This meant the average household paid about $2.20 more per week.

In its recent newsletter, Watercare advised customers of a potential price rise of 25.8 percent from July.

It said the rise was to "run our business while sticking to Auckland Council's borrowing limit".

Watercare said if the proposed rise went ahead the average customer bill would increase by roughly $29 a month. That's $348 annually.

The potential increase was included in the consultation document for Auckland Council's 10-year budget.

In the document, council said the increase in rates was to support a significant increase in capital investment across the next 10 years.

Watercare said the 25.8 percent rise could also apply to infrastructure growth charges.

In a statement to RNZ, chair Margaret Devlin said the board had to balance the vital need to invest in new water and wastewater infrastructure with council's directives to maintain a debt-to-revenue ratio of 340 percent, as well as ensuring growth funded growth.

"We know many Aucklanders are struggling with the cost of living and we understand the news of this projected price rise will not be welcome," she said.

"We want to reassure them that central and local government want to avoid significant price rises for Auckland; and they are working together to achieve a financially sustainable water model."

Devlin said they understood the ongoing conversations between central government and council were positive.

Watercare will give residents at least 10 days' notice of a potential price rise.

This story was originally published on RNZ News

and written by Finn Blackwell, Reporter

@FinnBlackwell [email protected]