State Water Board Drought Year Water Actions

Conservation Water Pricing

Conservation pricing is an effective tool to prevent wasteful water use. As a result, it is an important part of the portfolio for local water agencies' efforts to conserve water in the short- and long-term.

Directive 8 of Governor Jerry Brown's April 1, 2015 Executive Order B-29-15 promotes water conservation pricing mechanisms. This webpage provides background on the directive and issues related to conservation pricing, including compliance with applicable laws. On July 8, 2015, the State Water Board conducted a workshop to receive stakeholder input on the implementation of Directive 8.


Water pricing can reduce demand by providing an economic incentive for consumers to conserve water. Many water suppliers have established rate structures to incentivize water conservation.

Pursuant to the Executive Order, the State Water Board is to direct urban water suppliers to develop rate structures and other pricing mechanisms to maximize water conservation consistent with statewide water use restrictions. The specific form of that direction is left to the discretion of the State Water Board.

The State Water Board is aware that rate-setting is a complex undertaking that involves numerous local determinations. There is no one-size-fits-all approach to rate-setting, let alone setting rates that promote conservation. Conservation water pricing must be carefully tailored to local circumstances to be effective. Further complicating rate-setting, local water agencies must carefully construct and document their rate structures to comply with constitutional limitations from Proposition 218.

Pursuant to Directive 8, the Water Board is currently engaging with state agencies, water suppliers, and other stakeholders to address the financial, technical, political, and legal challenges associated with changing rates, surcharges, and other fees. As one element of its implementation of Directive 8, the Board will provide information and resources to facilitate the development and enhancement of water rate structures that encourage efficient water use.

The following information and reports provide additional information about the use of water rate structures to promote water conservation and efficient water use.

Efficacy of Conservation Pricing

Mechanics of Developing Conservation Pricing

Best Practices/Examples

Proposition 218 Compliance Information

Public Workshop

Related Documents

  • State Water Board's request to the California Supreme Court to depublish the recent Capistrano Taxpayers Association v. City of San Juan Capistrano concerning the City of San Juan Capistrano's tiered rates.

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