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Budget Based Rate Structures Provide Sustainable Water Savings

Budget Based Rate Structures Provide Sustainable Water Savings

The Irvine Ranch Water District understands the importance of preserving California’s water supplies, especially in times of drought, and has taken many steps over many years to encourage water use efficiency and the wise use of water including the implementation of innovative conservation measures.

A key component of the District’s efforts has been the use of budget based rate structures which discourage overuse while providing for significantly reduced outdoor water use through meaningful tiered pricing for any inefficient water use. This rate structure, implemented in 1991 in response to drought conditions, has since achieved a 50% reduction in per capita water use for residential customers. The average residential water use per person per day is around 85 gallons – among the lowest levels in the state.

Since 1991, IRWD customer bills have been calculated using an budget based rate structure that uses property specific water budgets and tiered pricing to provide customers with an economic incentive to encourage efficient water use.

How Do Water Budgets Work?

Each month customer receives a basic water budget that provides a reasonable amount of water for the customer’s needs

Budgets are based on the default number of residents in the home, type of home, landscape area, and the amount of water plants need to stay healthy based on actual daily weather conditions

Budgets change with the weather throughout the year. When the weather is hotter or windier, the budget goes up automatically. When it’s cooler or cloudy, the budget decreases automatically. The budget is printed on the monthly bill

Water bills are calculated based upon how much water is used and whether the customer stayed within their allocation

If a customer uses more water than their allocation, the water used that month is billed at increasingly higher tiers

Revenue generated by these higher tiers is applied to expenses associated with IRWD having to purchase additional imported water (the most expensive type of water for IRWD), water conservation programs and urban runoff treatment programs

As a result of the budget based rate structure and its water conservation program, IRWD is regarded as a statewide leader in water efficiency

The budget based rate structure is a documented method that results in sustained water conservation by customers.

How is the Monthly Water Budget Determined?

The basic monthly water budget provides a reasonable amount of water for a customer’s needs both inside and outside the home. It is calculated by

The number of people in the household

The square footage of landscaped area

If there is landscaping, the water needs will change as the weather changes and the water budget will adjust accordingly.

Standard Budget Chart










The indoor water budget is 50 gallons per person per day and depends upon the number of residents in a home. Water budgeted for landscape irrigation depends upon the type of home as illustrated in the chart below:

What is a Water Variance?

IRWD encourages residential customers who need more water than their basic budget to apply for a variance. Variances are given for additional occupants, special medical needs, and larger landscaped areas, among other things.

How Does IRWD Help Customers?

Customers who find they have used more than their monthly budget of water can participate in a free water efficiency home audit where an IRWD water use efficiency specialist will visit your home and help determine the cause of the over budget water usage.  Often this is a water leak, a sprinkler timer that isn’t working correctly, a leaky toilet, or a broken water irrigation system.   IRWD also offers rebates, free landscaping classes, how-to videos and a free monthly watering schedule.

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