What is a Budget-Based Rate?

“A water budget is a formal definition of the quantity of water that would be required by an efficient level of water use.”¹

“Water budgets—volumetric allotments of water to customers based on customer specific characteristics and conservative resource standards—are an innovative means of improving water-use efficiency.”²

“A [BBR]—also known as individualized, goal-based, and customer-specific rates—are block rates for which the block is defined by using one or more customer characteristics. [BBR] structures can be thought of as an increasing-block rate structure in which the block definition is different for each customer, based on an efficient level of water use for that customer.”²

“[Under BBRs, every customer] receives a personalized water budget…designed to meet their specific indoor and outdoor water needs, which means that no matter the size of your household or yard, you should be able to remain within your water budget and pay the lowest available price. Residential water budgets are calculated based on each customer’s landscaped area of their parcel, real-time localized weather data, and the number of residents in each home, among other factors. Residential water budgets vary from month-to-month based upon the weather and the number of billing days in each cycle.”³

“The indoor and outdoor water budgets are the calculated amount of water a household will require based on the size of the family, number and types of fixtures, and landscape needs.”⁴

“Water budgets for non-residential customers are the calculated amount of water a business will require based on its specific business needs for indoor and outdoor use.”⁵