The Water Services Entities Bill passed its first reading by a margin of 77 (Labour, Māori, and Green parties) to 42 (National and ACT).

[7][8] Following its first reading, the Water Services Entities Bill was submitted to the Finance and Expenditure Committee, which opened the legislation to public submissions on until 22 July 2022.

[11] The New Plymouth District Council voted by a margin of 13 to two to oppose the Bill and instead proposed an alternative Taranaki-wide water services entity.

However, the Council rejected Councillor Murray Chong's motion that they join the anti-Three Waters Communities For Local Democracy.

[13] The Dunedin City Council's submission advocated the creation of an entity to manage water usage for the Otago and Southland Regions.

[16] On 3 August 2022, the Queenstown-Lakes District Council's submission opposed the Bill on the grounds that its shareholding model did not account for high visitor numbers and rapid growth in the region, insufficient community understanding about the nature of the reforms, concerns that local community and territorial shareholder voices would be heard, and concerns about the diversity of representation on the regional representative groups.

Similar sentiments were echoed by Labour MPs Barbara Edmonds, Ingrid Leary, Anna Lorck, Helen White, Kieran McAnulty, and Green MP Eugenie Sage.

[18] On 23 November, the Labour Government decided to push the Water Services Entities Bill under urgency to compensate for the loss of a week's worth of parliamentary sitting time caused by Queen Elizabeth II's death on 9 September 2022.

Within New Zealand law, entrenchment clauses have traditionally been reserved for constitutional matters in the Electoral Act 1993 such as the voting age.

[23][24][25] On 7 December, the Three Water Services Entities Bill passed its third and final reading with the sole support of the Labour Party (64:50 votes).

Sage claimed that the Bill in its present form would allow National and ACT to privatise New Zealand's water assets.

[15][31][7] In early December 2022, Te Rūnanga o Ngāi Tahu Kaiwhakahaere (Chairperson) Lisa Tumahai welcomed the passage of the Water Services Entities Bill as a means of improving the quality of water services and allowing her tribe to share their governing expertise, commercial acumen, traditional knowledge, and scientific research into geology and hydrology with local councils.

[2] The ACT Party's spokesperson Simon Court also objected to the transfer of local councils' water assets into a new centralised bureaucracy and alleged that the proposed legislation would worsen ethnic divisions in New Zealand.