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An innovative approach to promote water use efficiency
Date:2/20/2014

RIVERSIDE, Calif. Increasing block-rate water budgets are an innovative type of escalating tiered price structure in which the consumption block sizes are based on household characteristics, environmental conditions, and a judgment by the water utility with regard to what constitutes "efficient" water use given those characteristics and conditions.

In these water budgets, prices are set relatively low for the most essential uses of water but then increase with usage. The price structure more accurately reflects the cost of supplying water and thus sends a more appropriate price signal to customers regarding water scarcity. It also helps water utilities to maintain fiscal balance despite uncertain fluctuations in supply and demand conditions.

But do block-rate water budgets encourage customers to conserve water?

Yes, according to Kenneth Baerenklau, an associate professor of environmental economics policy at the University of California, Riverside.

"Increasing block-rate water budgets appear to be a highly effective price-based conservation tool that does not require significantly increasing the average price paid for water," he said.

In his study, the first to estimate the conservation potential of water budget rate structures, Baerenklau used data from the Eastern Municipal Water District (EMWD) as they switched from flat rate pricing to increasing block-rate water budgets in 2009 in order to learn how much this rate structure change had reduced demand.

Baerenklau and colleagues then examined the monthly water use records of more than 13,000 single family households in EMWD's service area from 2003 to 2008 when EMWD was using flat rate pricing. They related each household's monthly water use to the price paid for water, household income, local evapotranspiration requirements, a
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Contact: Iqbal Pittalwala
iqbal@ucr.edu
951-827-6397
University of California - Riverside
Source:Eurekalert  

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