Water bills are confusing and challenging for consumers to understand and due to much needed, but more intricate water price structures they get more complicated every day. Ask someone what’s the price of a gallon a gas and they respond in a few seconds and are relatively close to the exact amount they would pay at their local gas station. Ask the same person how much they are paying for a gallon of water and you get a confused look. Give them their water bill and a calculator and they may be able to give you the price in 10 – 15 minutes. Ask them how much water they use and you will receive a similar response. In order to conserve water, it is important to know how much you use and how much you pay for water. We all know the quote “If you can’t measure it, you can’t manage it.” In the case of water, we are doing a great job of measuring it, but interrupting the data can be difficult.
Traditional Water Rates
One common traditional water pricing is a flat rate or fixed rate 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 water they use they are charged the same amount every month. Most fixed-rate water structures charge a nominal amount for water, and the homes don’t have a meter so the opportunity for waste is very high. 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 a 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
Typically water agencies also charge a water base fee or meter charge in addition to your water use. Almost all also add 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. This is very important because the sewer charge is often equal to the price of water. Installing a separate meter for your irrigation could save you thousands of dollars a year. Be sure to talk with your water agency before you move forward with adding a meter for your landscape water and gain their approval first.
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. This is a great tutorial from the city of Gilbert, Arizona on how to read your tiered rate water bill.
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 the 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 the 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.