Understanding Your Water Bill

Reading time: 5 minutes

5 minutes read

Last updated: 06/29/2020
Understanding Your Water Bill

What's on my Bill?

The water bill from your county, city, or town contains two main items: your water supply and your sewer charges. As most end-users have only one meter installed, the amount billed for sewer is based on the water usage. In many cases, your city or municipality will include extra fees or charges such as demand charges or water supply replacement charges and fees for stormwater management or restoration fees for river or bay restoration.

The water section covers the water delivered into your home from the water treatment center while sewer reflects the water leaving your home to be treated at a water treatment facility. Since sewer is typically not metered, you’ll pay a sewer charge based on the amount of water you’ve used. This also includes the water that doesn’t actually end up in the sewer systems such as water to wash your car or to water your lawn and garden.

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Billing Information

The top section of your water bill typically contains information about the bill itself such as billing date, the current billing period, payment due date, the amount due and your account number with the water supplier. It normally also includes your name and the service address where the water is delivered. You should check this information to make sure that you’re paying the correct bill. Many utilities provide a breakdown of charges and a section with an itemized list of charges.

Water Meter Data

Your water bill must contain your meter number and water usage data based on the meter reading for the bill. At a minimum, it must include the current and last meter readings and the dates the readings were taken. Typically, the bill shows the number of days in the billing period. It also includes the number of gallons or cubic feet used. This number can be calculated by deducting the current meter reading from the previous reading.

To balance your water bill, read your water meter regularly and compare your readings to the utility’s readings provided on the bill.

Water Rate Structures

Water and sewer rates are subject to change. Besides the rate changes that may occur when the utility must invest in new infrastructure or when the water quality decreases, many utilities adjust their rates automatically based on changes in the Consumer Price Index (CPI). This typically means that water and sewer rates change annually. Utility companies across the country use a variety of rate structures to bill their customers. The most common water rate structures in the U.S. are Uniform Rates, followed by Increasing Block Rates and Decreasing Block Rates. Blocks are typically measured and billed in 1,000-gallon increments.

If you’re under a Uniform Rate, you’re paying the same unit price per metered gallon or per cubic foot, regardless of the total number of units metered. The only variable on your bill is your water usage. Utilities may charge different rates for residential households, large businesses and industrial users.

With an Increasing Block or Inclining Block Rate, the utility company charges a higher unit price for each succeeding block of usage. You’ll pay more for every gallon after a certain threshold, often 3,000 or 5,000 gallons in a billing period. Increasing Block Rates are designed to efficiently use the water infrastructure and to promote water conservation.

Declining Block Rates are basically the opposite of Increasing Block Rates. The utility company charges a lower unit price for each succeeding block of usage and you will pay less for every gallon after you reach a given threshold. Decreasing Block Rates are used to subsidize large consumers. 

Other rate structures include flat fees, seasonal rates, drought rates, or water budget-based rates. If you’re under a flat fee, all customers pay the same fee, regardless of the amount of water used. 

Monthly Minimum Charges

Many utilities charge a fixed fee as a base charge and a variable fee to cover the cost of your water usage. Base charges help cover costs for building and maintaining the water infrastructure, services for meter reading, billing and other customer service functions, as well as for the water delivery to your home. The variable charge pays for the usage and reflects the costs of the water supply and the delivery to your home or business. Some utilities charge a minimum amount of gallons, regardless of the actual amount of water used.

Water Usage

The water usage section informs you about how much water you have used in the billing period. Depending on your utility, water usage is typically measured in hundreds of cubic feet (CCF) or in gallons. Sometimes you may see the term Mgal; it stands for 1,000 gallons. One CCF is equal to 748 gallons.

Some utilities provide a month-to-month usage history such as average use charts or information on how your household compares to similar households in your neighborhood. This section will help you better understand usage habits. 

Check for spikes or sudden increases in your water cost and usage. If your usage remains high after a sudden increase you may have a leak in your system. A slow but steady increase in water consumption that does not correlate with a change in household size, the start of the lawn-watering season, or other factor often means there is a water leak.

Water Conservation

Understanding how to read your water bill can help you save water, energy, and money. The easiest way to save money on your water bill is to conserve water. If your usage indicates a possible leak, try to have it fixed as soon as possible to avoid wasting water and money.
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