All water utilities should establish a water pricing structure that includes the full cost of operating, maintaining, and protecting the water supply system. Water revenues should be kept separate from the municipality’s general fund, in order to prevent cross-subsidies.  

A full cost water pricing structure includes, but is not limited to the following:

• A comprehensive water conservation program, including retrofits, rebates, audits, education, leak detection, and advanced metering technology;
• Staff costs, including training and professional development;
• Pumping, maintenance, electricity, and fuel;
• Treatment plant costs;
• Distribution system operation, repair, and maintenance;
• Purchase or protection costs for watershed lands, well sites, aquifer recharge areas, or recharge sites; and
• A capital replacement fund, capital depreciation account, and debt service.

Full cost pricing can take the form of any rate structure so long as all costs are recovered through prices. Water systems should perform a rate evaluation at least once every two years to adjust rates to cover the cost of unanticipated capital needs, inflation and changing demand as needed.

13.a    All municipal water utilities should utilize enterprise accounts

13.b    EOEEA should develop a methodology for assessing environmental costs of water withdrawals

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