Water budgets and rate structures: Innovative management tools

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. Once thought to be impractical because of technological constraints, water budgets linked with an increasing‐block rate structure have been implemented successfully by more than 20 utilities. Key issues identified in this examination of water budgets and their potential value to North American water utilities include: different practical approaches to water budget rate structures; the benefits and challenges of these approaches; the potential uses of water budgets during drought; and, important steps in the water budget implementation process.