Pricing Reclaimed Water in the Sunshine State….An Individualized Approach that Makes Sense

Over the past decade water providers across the United States have been dealing with a tremendous number of challenges including the unprecedented capital reinvestment needs, increasing regulatory requirements and changing climate patterns. In response to these issues water utilities have been forced to become more efficient and nimble in their operations as well as more sophisticated in terms of how revenues are generated from water sales. The pricing of water service has been and will continue to be a key factor in the success of today’s water utilities.Our presentation presents a case study example of a water utility in Florida that took a unique approach in pricing its irrigation water service. Specifically, the presentation provides an overview of how the Toho Water Authority, located in Central Florida, developed and implement customized water budgets for its’ commercial irrigation customers. The Toho Water Authority currently provides potable and reclaimed water to commercial accounts for irrigation purposes. In 2017, the Authority engaged Stantec Consulting Services to assist in the development of water budgets for the Authority’s irrigation accounts. Historically the Authority utilized an inclining block rate structure with progressively more expensive water within each tier. Based on review of water usage patterns, the Authority became convinced that the rate structure was not appropriate in light of the significant variations in irrigation needs between various commercial accounts (i.e. accounts with 2 acres of irrigable area and accounts with a quarter acre lot were placed in the same tiers despite the fact that the irrigation needs differ significantly). To provide a more equitable structure Stantec worked with the Authority to define specific water budgets for each individual irrigation account. The individual water budgets were developed based on irrigable area, crop type, soil type, beneficial rainfall, evapotranspiration data and irrigation efficiency for each irrigation account. While water budgets have been implemented in California to deal with persistent drought conditions, Toho is the first water utility in Florida to consider the approach. The budgets developed for Toho, recognize the unique weather patterns experienced in the State of Florida, which demonstrates distinct seasonal variations in rainfall. The presentation outlines the approach, key considerations and outcomes.