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As source of supply constraints increase, drought conditions affect certain areas of the country with greater frequency, and the cost of treating water continues to rise, water utilities have an increasing responsibility to encourage the wise use of this precious resource by their customers and, where appropriate, to implement programs that could have the effect of reducing per capita consumption. The use of more efficient plumbing fixtures and appliances, such as low-flow toilets and showerheads, among other factors, has already resulted in a significant drop in per capita consumption over time. The increasing need to use this resource ever more efficiently will likely continue and magnify this trend. Acting as responsible stewards of scarce water resources will increase financial pressure on water service providers as fixed costs must still be recovered despite decreasing per capital sales volumes. One potential solution to this challenge is the concept of "decoupling" rates from sales volumes, which can help address both the need to more efficiently use water while keeping the utility financially sound. The electric power industry has experienced similar issues with regard to demand side management programs designed to better control the need for new generating capacity or the use of high priced fuels.

This PDF is a 50-state survey regarding the practice of individual commissions on Decoupling.

State Utility Regulation

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