Implementing Consumption-Based Fixed Rates in Davis, Calif.

Authors: Spang, Edward S.; Loge, Frank J.; Abernathy, William; Dove, Douglas R.; Tseng, Catherine; Williams, Matt
Publication: American Water Works Association – July 2015
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Abstract: Water utilities in California must promote water conservation, yet have a limited suite of rate structures that can be used to charge for water. Under traditional rate structures, a strong price-based conservation signal can produce conservation yet result in revenue instability. California public water utilities face additional challenges as a result of the standards for reporting, accounting, and proportionality under Proposition 218. One solution for resolving these structural tensions between conservation and fiscal solvency in a Proposition 218 environment is the implementation of consumption-based fixed rates (CBFR). This article describes the design and implementation of CBFR in Davis, Calif.