Understanding the Five Different Types of Water Rate Structures

The way commercial and residential facilities are billed for water varies throughout the country. 

Referred to as "rate structures," they help utility companies build and maintain water infrastructure, treatment plants, and underground piping, to deliver water and then return it for treatment.


The thing we need to know about water rate structures is that a facility in one area of the country may pay considerably more or considerably less for the same amount of water in another location in the country, based on its rate structure.

Here are the five most common water rate structure in the U.S.:

Flat Rates: This is one of the oldest and simplest type of rate structure. Very simply, all customers are charged the same fee no matter how much or how little water they consume.  This rate structure is slowly disappearing.

Uniform Rates: Often confused with flat rates, the big difference is that a uniform rate uses water meters. A set fee is charged to all customers based on how much water they consume. 

Increasing Block Rates:  This structure encourages conservation and is commonly found in urban areas.  If a facility uses 1,000 gallons of water per month, it falls into one block, and is charged for water based on that blocks charges. But if it uses 1,001 gallons per month, the facility is bumped up to the next block, which will have higher charges.

Decreasing Block Rates: In farming areas of the country, farmers typically use more water during certain months of the year than in others.  During heavy use times of the year, the price of each succeeding block of water usage is charged at a lower rate than the one before.

"Another type of rate structure is called 'drought rates,'" says Klaus Reichardt, CEO, and Founder of Waterless Co LLC, manufacturers of no-water urinals. "Water rates go up based on the local area's drought level. These rates can be significant [and]  unfortunately, we are likely to see more utilities adopting drought rate structures in the future."

For more information on the features and benefits of Waterless Urinals, contact a Waterless Co representative.