Jersey's environment committee wants to set a minimum standard for safe drinking water in Jersey.
Taking out nitrates would be costly say water bosses
But the island's water company says being forced to comply would result in higher costs - which would have to be passed on to the customer.
The Jersey New Waterworks Company admits in its annual report that it sometimes records levels of nitrates in its reservoirs which are higher than the EU standard.
Water companies in the EU have a legal obligation to supply water which does not exceed a maximum of 50 milligrams of nitrates in each litre.
Dr John Harvey, Jersey's medical officer of health, said he supported a change in the law so Jersey complies with EU standards.
He said people were concerned about the possible long term consequences of high levels of nitrates in drinking water.
But David Norman, chairman of the Jersey New Waterworks Company, claimed that using a denitrification system would be extremely costly
Mr Norman said there was no proof that imposing new standards for lower nitrate levels would have discernible health benefits.
And he said any costs would inevitably have to be passed on to the customer.
The company announced on Monday that water bills would rise by 4.5% this year to pay for £50m of new projects, to keep up its services and to extend its supply network.