Water bills are a challenge for most consumers to understand and getting more complicated.  If I ask someone who drives, what is the price of a gallon a gas they can respond in a few seconds and be relatively close to the exact amount they would pay at their local gas station.  If I ask the same person about the price of a barrel of oil sometimes they know, but if they are able to use the internet, they will have the price in a matter of minutes.  If I ask the same person how much they are paying for a gallon of water and how much water do they use I get a confused look.  If I give them their water bill and a calculator they may be able to give me the price in 10 – 15 minutes.  In order to conserve water it is important to know how much you use and how much you pay for the water.

Traditional Water Rates

When traditional water pricing is discussed it is assumed a fixed charge on a monthly basis for water.  For example, approximately 60% of the homes in Sacramento California pay a fixed rate for water.  It doesn’t matter how much or little they use they are charged the same amount every month.  Most fixed rate water structures charge a nominal amount for water.   Another traditional pricing is the simple uniform rate.  Consumers pay the same amount for each gallon of water they use.  Sounds simple, but where this gets tricky is determining how much water you use.  Almost all water bills quote the amount of water in HCF or CCF not gallons.

  • HCF stands for 100 cubic feet of water.  There are 748 gallons of water in 100 cubic feet.  When your bill reads 6 HCF you need to multiply 6 by 748 to get the total of 4488 gallons of water
  • CCF also stands for 100 cubic feet of water.  The first C is the Roman numeral “C” for 100.  The following CF is cubic feet.  Once again you need to multiply the units by 748 to know how much you pay a gallon

You also will typically see a water base fee or meter charge in addition to your use.  This is typical for most rate structures as well as a sewer charge.  A sewer charge should not apply to water used for landscapes and if you have a separate meter for your landscape water you should not be paying a sewer fee for that water.

Simple Tiered Water Bill

In a tiered pricing structure consumers pay more as they use more.  The tiered pricing increases in steps as more water is used.  Below is a typical tiered water price structure:

Tier Amount in gallons Price per 1000 gallons
Tier 1    0 – 8000 $4.79
Tier 2     8001 – 22,000 $5.51
Tier 3     22,001 – 30,000 $6.88
Tier 4  Over 30,000 $10.33

Please notice the tiered rates are per 1000 gallons not CCF or HCF.  The fixed fees we discussed earlier also apply to tiered rate pricing. Your tiered rate pricing is going to vary depending on if the property is a single family residence, commercial property or multi-family housing property. 

Budgeted Tiered Water Bill

A water budgeted tiered rate structure is sometimes referred to as a goal system, allocated system or customer specific water rate.  For water budget tiered rates the water utility determines how much water a consumer should use.  The utility takes into account variables like square footage of landscape, daily weather and climate, and season of the year, as well as the number of people in the household.  A water budget or goal is established and then depending on how much less or more than the estimated budget for the property an amount is charged for water. Below is an example of a tiered water budget rate schedule:

Tier Amount of Budget Price per 1000 gallons
Tier 1: Excellent Use 75% $2.49
Tier 2: Efficient Use 76% – 100%  $4.29
Tier 3: Inefficient  101%- 140%  $8.79
Tier 4: Excessive Over 140% of budget $16.41

In this example it is easy to see conservation is rewarded with significantly lower water rates. There are many variations of this rate schedule used by water agencies.  I have seen rates much higher than these and consumers placed into the excessive categories at a much lower % of budget. The incentive for conservation is high and as water agencies implement these types of rates they have been very generous with the budgets they have been determining.  In the future I believe we will see  stricter budgets and higher percentage increases as water use surpasses the water budget.

As a homeowner or building owner or manager it is important to know what type of water rate structure your property is under.  It is also important to carefully manage to the structure.  Monthly or weekly meter reading and smart controllers, with flow sensing can help you determine where you are on consumption and help you make adjustments to stay in the lower tiered rates.  Water bills have been complicated in the past and are getting more complex in the future, but a thorough understanding and monitoring of the bills will pay off.

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  1. Alan Harris Reply

    Your article about water bills inspired me to look at my water bill…which I rarely ever do. I use a bill paying service and so long as the bill is within the parameters it is automatically paid. My water authority does report consumption in 1000 gallon increments. Last month I used 4,000 gallons of water and paid $0.005424 per gallon. If I was able to cut my water use in half it would only save $10.50 per month. However, if my water use increased 250% I would pay $0.0063 for each gallon of water used over the first 10,000 gallons.

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