Conservation-Based Water Rates

Conservation-Based Water Rates

Opportunities to Fund Your Agency’s New Rate Structure

Using Proposition 84 grant funding from the State, SAWPA is able to assist retail agencies in the Santa Ana River Watershed implement a conservation-based water rate structure, also known as budget-based rates.

Benefits of Conservation-Based Water Rates

Customer Engagement: Conservation-based rates use price tiers that increase as water use rises. The amount of water in each tier is often calculated using aerial mapping and U.S. Census data to determine the water needs of that customer. With an individualized water budget reflected on their bills, customers are more engaged with their water usage because it reflects realistic and unique water targets.

Fairness: Under conservation-based rates, a customer’s bill reflects individualized efficiency-based targets (tiers) which is beneficial to an agency with unique customer needs. The method of calculation of the tiers is the same for all customers in that customer class.

Efficiency: The most efficient customers are rewarded under the tiered pricing. When customers reduce their water use, their bill is lower.

Regulatory Compliance: Although adopting the rate structure is not a requirement to comply with new state law (AB 1668 and SB 606) enacted in May 2018 which requires water agencies to report their usage against a water budget, it can help an agency that is not in compliance. If an agency is using water beyond the overall agency budget, the rate structure’s budget-based tiered pricing can help the customers who are causing the agency to be non-compliant reduce their inefficient water use.