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Michelle Mehta
mmehta@nrdc.org
(310) 434-2300
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Volumetric sewer pricing is the simple concept of billing a customer for the volume of water discharged to the
sewer based on the water meter reading—water the customer actually uses as opposed to a flat charge. The
less water a customer uses, the less the bill will be. As a result, wastewater volumetric rates provide important
incentives for water efficiency to customers and offer a more fair pricing structure. According to a study
commissioned by the Natural Resources Defense Council (NRDC), converting flat-rate residential customers to
volumetric rates could eventually save California nearly 100 billion gallons of water per year, a significant benefit
to both water suppliers and wastewater treatment agencies.
WATER
FACTS
Volumetric Pricing for Sanitary Sewer
Service in California Would Save Water
and Money
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(PDF
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THE NEED FOR VOLUMETRIC
WASTEWATER PRICING
Although roughly 90 percent of California households served
by a public water supplier pay for drinking water through a
volumetric rate applied to metered water deliveries, about
70 percent of such California households pay for sewer
service through a flat, non-volumetric charge. While fixed
charges may be simple, they do not distinguish between
customers within the same class who produce larger amounts
of wastewater and those who produce smaller amounts.
Fixed charges also do not provide signals to customers
about the potential monetary savings from water use
efficiency, or onsite treatment and reuse. With sewer charges
equal to or greater than water charges in many jurisdictions,
the price signal rewarding water efficiency is being cut in half
for the majority of California households.
Timely adoption of volumetric wastewater
pricing would contribute 10% of the 38
GPCD needed by 2020 for the state to
comply with the Water Conservation Act
of 2009, counting short-run savings alone.
With California’s landmark Water Conservation Act
of 2009 now requiring that per capita urban water use be
reduced by 20 percent by 2020, water suppliers throughout
the state are looking for additional ways to achieve water
savings; cooperation with wastewater agencies is one such
means. Thus, converting to volumetric sewer pricing can
save water in addition to providing more equitable
wastewater financing.
Moreover, volumetric wastewater pricing benefits
wastewater agencies by reducing flows, which can:
n Help to preserve wastewater treatment capacity,
and thereby postpone or eliminate the need for costly
additional treatment plants.
n Reduce operating costs.
n Reduce sewer overflows, which endanger public health
and the environment.
THE WATER SAVINGS FROM VOLUMETRIC
WASTEWATER PRICING ARE QUANTIFIABLE
AND SUBSTANTIAL
A recent study by A&N Technical Services commissioned
by NRDC quantifies the effect of shifting residential sewer
service billing in California, from collections based on flat
charges to a billing system based on the volume of water
consumption.1 The analysis uses statewide water and
wastewater data compiled by the State Water Resources
Control Board (SWRCB) and the California Department of
Water Resources (DWR), as well as price elasticity estimates
from the literature on the topic. The potable water savings
from switching to volumetric wastewater pricing are
quantifiable, and the savings are impressive.
Converting residential customers to volumetric
wastewater pricing can save California approximately
141,000 acre-feet per year (AFY) in the short term (a one
to four year period), and over 283,000 AFY in the long term
(over a 10 to 20 year period; see Table 1). An acre-foot of
water is enough to supply up to eight individuals—one to two
families—in California for a year. The savings are more over
the long term because demand is more elastic in the long
run (customers can replace water-using fixtures with more
efficient ones) than in the short run (customers can mainly
change their behavior).
Costly expansion of wastewater treatment capacity can be post-
poned or avoided by water conservation and efficiency measures,
such as water savings gained through volumetric pricing of sewer
service. Source: Google Maps and U.S. Geological Survey
Table 1: Estimate of the Statewide Volume of Price-Induced
Water Conservation from Volumetric Sewer Pricing by the
California Department of Water Resources Hydrologic Region,
Expressed in Acre-Feet per Year.2
Hydrologic
Region
Total
Estimated
Residential
Use (AFY)
Short Run
Water
Savings (AFY)
Long Run
Water
Savings (AFY)
North Coast 22,335 715 1,429
San Francisco
Bay
782,250 25,025 50,051
Central Coast 123,283 3,944 7,888
South Coast 2,173,581 69,536 139,073
Sacramento
River
588,625 18,831 37,662
San Joaquin
River
180,141 5,763 11,526
Tulare Lake 516,986 16,539 33,078
North
Lahontan
1,770 57 113
South
Lahontan
9,753 312 624
Colorado
River
29,331 938 1,877
California
(Total)
4,428,055 ~141,700 ~283,400
AFY= Acre-feet per year
The savings can also be expressed as gallons per capita per
day (GPCD). For California as a whole, simply converting to
volumetric wastewater pricing could save four GPCD in the
short run and seven GPCD in the long run. Thus, the timely
adoption of this one simple measure would contribute 10
percent of the 38 GPCD water savings needed by 2020 for
the state to comply with the Water Conservation Act of 2009,
counting the short-run savings alone.3
IMPLEMENTATION CHALLENGES
CAN BE OVERCOME
Cities across California, including Los Angeles, San Diego,
Long Beach, and San Luis Obispo, and across the country,
including New York, Boston, Atlanta, Houston, Philadelphia,
and Seattle, already use volumetric wastewater pricing.
Momentum is building in other areas to convert—for one
thing, the California Urban Water Conservation Council’s
best management practices require signatories that provide
both water and wastewater service to adopt volumetric sewer
rates.4 Second, the rising cost of providing wastewater service
has encouraged consumers to ask for volumetric rates, which
are more equitable and affordable for conserving customers.
The challenges that a wastewater agency might anticipate
in converting to volumetric pricing can be addressed with a
modest investment of time and effort. Separate sewer meters
are not necessary. Residential customers with volumetric
sewer rates are typically billed for sewer service based on the
amount of water use recorded by the water meter serving
the home. This method uses a meter reading for the winter
months (when outdoor use is at its lowest) as a basis for the
amount of water that enters the sewer system from the home
throughout the year.
Customers will see additional utility bill savings from high efficiency
products when volumetric wastewater billing is adopted.
The challenges that a wastewater
agency might anticipate in converting to
volumetric pricing can be addressed with
a modest investment of time and effort.
Printed on recycled paper ?Natural Resources Defense Council January 2012 www.nrdc.org/policy
1
Chesnutt TW. Volumetric Pricing for Sanitary Sewer Service in the State of California. Encintas, CA; A & N Technical Services, 2011. http://docs.nrdc.org/water/files/wat_11121301a.pdf.
2
Modified from Chesnutt, note 1.
3
Statistics in Canada reveal an even more dramatic water conservation response when pricing is converted from a flat rate structure to a volumetric structure. Consumption there is 70 to 80%
lower nationally under volumetric rates than flat rates. Source: 2008 Municipal Water Pricing: 2004 Statistics, p. 8. Gatineau, QC; Environment Canada: 2008. ec.gc.ca/Publications/default.
asp?lang=En&xml=0B6E24B6-0421-4170-9FCF-9A7BC4522C54.
4
California Urban Water Conservation Council. Memorandum of Understanding Regarding Urban Water Conservation in California; [see BMP 1.4, Retail Conservation Pricing, Part II-Retail
Wastewater Rates]. Sacramento, CA; California Urban Water Conservation Council, 2010.
5
Natural Resources Defense Council. Volumetric Wastewater Pricing: Frequently Asked Questions. New York, NY; Natural Resources Defense Council: 2011.
http://www.nrdc.org/water/volumetric-pricing.asp.
Wastewater agencies will collect customer water use
data from water suppliers with whom they have common
residential customers. Data-sharing is already in place
between many water and wastewater agencies for the large
commercial and industrial customers that they have in
common. Further, wastewater agencies can continue to use
a combination of fixed charges and variable charges in order
to ensure a stable revenue stream. Using winter usage for
billing purposes year-round will also help maintain stable
revenues for wastewater agencies.
Explaining the new rate structure to the community will
be a particularly important aspect of conversion. Agencies
that have successfully converted undertook community
outreach and public hearings to ensure that their customers
understood the benefits of converting; namely, that
customers would be much more in control of their rates
based on their own water usage. While this initial public
outreach and billing system change can take some time
and effort, administering the new rate structure is
comparatively routine.
These and other issues are discussed further in Volumetric
Wastewater Pricing Frequently Asked Questions, available on
NRDC’s web site.5
The water savings resulting from
volumetric wastewater pricing will benefit
wastewater agencies by reducing operating
costs, helping to preserve wastewater
treatment capacity, and helping to reduce
sewer overflows.
CONCLUSION
The water savings resulting from volumetric wastewater
pricing will benefit wastewater agencies by reducing
operating costs, helping to preserve wastewater treatment
capacity, and helping to reduce sewer overflows. If done
correctly, the pricing of water and wastewater service can
be a powerful signal to consumers about the cost of water
and wastewater infrastructure, and the scarcity of water
resources. Converting to volumetric wastewater pricing
is an efficient, relatively low-cost way of saving California
billions of gallons of water each year, saving money for water
suppliers, wastewater treatment agencies, and the customers
they both serve.
Volumetric pricing for residential sewer service can be accomplished
by using the customer’s existing water meter.
