UWM Plan - Municipal Water District of Orange County

Section 4
Demand Management Measures
MWDOC Budget Based Tiered Rate Study Grant with DWR - The purpose of the study
is to concurrently assist 13 retail water agencies in examining the feasibility, approach
and implementation of water budget rate structures or various aspects of water budget
rate structures. The goal is to help urban communities cope with water shortages and
drought conditions while at the same time provide the benefits of achieving water savings
every year. Equitable allocation of indoor and outdoor water needs by account allows
agencies to scientifically determine which accounts are over their allotment. Based on
this information, a water agency can focus their resources on saving water from these
accounts based on price and/or other complementary device based conservation
programs. The flexibility of water budgets in this manner makes them the most equitable
mechanism for water conservation.
Water budgets can alleviate the adverse effects of drought conditions with two primary
mechanisms. First, it can reduce water consumption by sending a price signal
specifically to those customers who are the least efficient with their water use. Further,
water budgets address equity or fairness, by allocating water based on demographic and
geographic factors such as household size, landscaped area, and plant type and weather
conditions. Documented water savings on the order of 20% and higher have been
achieved via implementation of these types of rate structures.
Some of the challenges agencies face when evaluating and implementing a water budget
are determining staff and billing system requirements, designing defensible water budget
allocations based on scientific data, gathering public support and setting realistic
conservation goals. These challenges are often compounded by lack of technical expertise
and policy inexperience. This project proposes to assist the agencies in overcoming these
types of obstacles.
Group workshops are held with all participating agencies and then each agency will
conduct additional detailed work related to the policy and technical issues associated with
water budgets in their service area. As the efforts progress, meetings within each agency
are held with the appropriate policy-makers and senior staff to refine the implementation
aspects. For some agencies, a billing system compatibility analysis will be conducted to
determine if the existing billing system can handle budget based tiered rates and/or if
changes or modifications are needed. Lastly, by channeling the energy of 13 neighboring
communities to examine water budgets, it creates the political environment required for
them to be adopted and increase the likelihood of success.
The Grant Study includes three specific components, although not every agency
participates in every component. The components are:
1) Water Rate Development
2) Use of Parcel Data for Water Budget Development
3) Billing and Accounting System Needs (hardware and software)
Municipal Water District of Orange County
2010 Regional Urban Water Management Plan
Final
4-21