[wkyle]

I'm not sure if this claim really makes sense - if water districts are incentivized by income, and if high users really have such inelastic water consumption, then wouldn't the water district continue to raise the tiered rates at the highest level?

Thus, under these assumptions, the current tiered rates should accurately reflect the marginal price that the wasteful users are willing to pay, and any rise in price would result in a decrease in consumption.

[RosanaAnaDana]

Water districts are not able to do so with their tiered rates. They aren't necessarily for profit corporations (some are), although in many ways they are managed like them. The additional revenue allows for the addition of staff, the implementation of new programs, it helps cover the cost of aging infrastructure. Its not necessarily a bad thing. Tiered rates with straight caps might make more sense, but again, districts are disinterested from this. They generally need to make 'across-the-board' reductions of some set amount (say 20%). For a long time, it has not been in their interest to reduce the usage of these highest rate paying tiers of users.

[googlryas]

Well, then keep ramping the rates up for big users and start giving smaller users more free water. A lot of people will just use the same amount of water even if their bill is eliminated.

[ethbr0]

> The additional revenue allows for the addition of staff, the implementation of new programs, it helps cover the cost of aging infrastructure.

We could do away with usage tiers, but then we'd have to fund the missing utility revenue out of state/local budgets.

Although, for states with modern-sized populations, managing and funding water infrastructure at the state level seems to make more sense.