Ron Perrie, the previous Area 'F' Director, asked Stantec Engineering to conduct a high-level feasibility analysis of sewer on the West Bench in 2005. The full report is below.
If we adjust these figures for inflation (e.g., 2% per year), add connections costs (say $2000 per household) and annual sewage treatment payments to the City of Penticton, we get the following annual costs. The table shows the sensitivity of this amount to (a) grants and (b) population growth on the greater West Bench. So for example, if we saw a 10% increase in the number of households on the Bench and received 50% grant funding we could expect to pay $1861 per year for the next 25 years. That is a lot of money (which explains why we do not have sewer). However, a developer looking to build a high-density pocket development might be willing to fund a disproportionate part of the capital cost. A few such developments and costs for existing residents could fall significantly.
A question you might ask is whether sewer means everyone can subdivide their lot? In the past we have seen stiff opposition to the wholesale densification of the West Bench. The province-wide 1 Ha restriction on lot sizes for septic systems means subdivision cannot happen without sewer. However, nothing says we have to change our zoning bylaw if we chose to construct a sewer system. That is, densification does necessarily follow sewer--it is a choice.
Given the economics above, however, it seems reasonable to expect that some form of densification (e.g., pocket densification) will be required to help fund a sewer. The idea in pocket densification is that large parts of the West Bench remain at current density but certain pockets here and there are permitted much higher density (e.g., multifamily, Redwing-like gated communities, etc.)
Update 05 Jan 2016: A back-of-the-envelope analysis of densification has been conducted by RDOS staff (see posting here). This analysis was conducted in an effort to help School District 67 better understand the growth potential in the West Bench Elementary School catchment.