Water Rates: Conservation and Revenue Stability – Issue Brief

Water Rates: Conservation and Revenue Stability – Issue Brief

Published: August 2013

Authors: The Pacific Institute and the Alliance Water for Water Efficiency

Pages: 4



Supplying water to customers is a business. As in any business, water sales revenues need to be accurately forecasted and balanced against current and long-term future water supply and treatment costs. Conservation and efficiency is recognized as a way to effectively reduce long-term costs, and is often the most cost-effective “new water supply” option available. However, planning for water conservation programs must be done carefully to avoid revenue instability issues for the system.

Comprehensive water supply planning is required by law in California as well as in many other states, and is premised on the concept that water suppliers should plan water supply portfolios that guarantee long-term, sustainable delivery of safe, reliable drinking water. This means prioritizing water conservation and efficiency programs in that portfolio. Water service providers can promote conservation and efficiency in a variety of ways; however, here we focus on conservation-oriented water rates.


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