Conservation Pricing

All District water utilities should implement at least a 3-tiered rate structure by 2006. The following guidelines should be used to define this multi-tier rate for residential and commercial customers:

• The first tier is typically designed to include up to 125 percent of the average winter use.
• The second tier is defined by the bounds of the first and third tiers, and the rate for this tier should be at least 25 percent above the first tier rate.
• The third tier would be determined by a rate study, and would contain the highest 5-10 percent of customers, who typically use 10-20 percent of the total volume of water used. The billing rate for this tier should be at least 200 percent of the billing rate for the first tier.
• Certain industrial / commercial / institutional water users may need to have their individual systems analyzed to determine appropriate base and tier levels.

Conservation pricing is a system in which the price you pay for water depends on how much water you use. The more water used, the higher the price. The goal of conservation pricing is to reduce excessive discretionary water use, especially outdoor irrigation, by making water use increasingly more expensive. Conservation pricing encourages smart water use and protects the region's water resources.

Increased population, droughts, lack of groundwater, degradation of water quality and competition among water users have made water a more precious resource than ever. Pricing is a powerful means of signaling the importance and scarcity of water to users, most of whom experience little connection between the amount of water they use and their total bill.

By applying conservation pricing, we can more clearly communicate the real value of water. Water withdrawals from our watersheds have large “unpriced” external effects, such as biological degradation and water quantity depletion. Conservation pricing reduces demand and reduces the ecological costs of water use to society.