Research

Executive Summary

Water conservation has become an established objective of modern water utility regulation. In New York, the Public Service Commission has approved conservation-oriented residential rate structures, while utilities employ customer education, rebate programs, water-efficiency initiatives, and public outreach that encourages the responsible use of water resources. Among these measures, inclining block (tiered) residential water rates have become an important regulatory tool for encouraging efficient water use through progressively higher prices as residential consumption increases.¹

At the same time, residential households differ in ways that may influence ordinary water demand. Residential households vary considerably in occupancy. Some consist of a single resident, while others include multiple adults, children, or several generations sharing one home.

Because more residents naturally require more water for everyday activities such as drinking, cooking, bathing, sanitation, and laundry, an important regulatory question arises: Can conservation-oriented residential water rate design, an optional adjustment to the initial residential water allocation based on verified household occupancy, administrative feasibility, and customer privacy operate together within New York's existing regulatory framework?

This report examines that question through a review of official New York Public Service Commission proceedings, Department of Public Service materials, utility filings, government publications, industry guidance, and documented conservation programs administered by comparable water utilities. Throughout the report, New York regulatory sources receive primary emphasis, while comparative utility examples are used solely to illustrate documented administrative practices rather than legal precedent or recommended policy for automatic adoption.

The research demonstrates that water conservation remains an important public policy objective and that conservation-oriented residential rate structures continue to serve an important role in encouraging efficient water use. The evidence also demonstrates that conservation policy distinguishes between essential household water use and discretionary demand, recognizing that ordinary indoor household needs differ from water uses that present greater opportunities for voluntary conservation. Research reviewed throughout this report further establishes that household occupancy is a significant determinant of ordinary residential water demand and that New York's own regulatory framework recognizes the importance of evaluating conservation-oriented rate structures using actual customer data.

The report also examines documented utility programs demonstrating that an optional adjustment to the initial residential water allocation based on verified household occupancy can be incorporated into conservation-oriented residential rate structures while preserving conservation objectives. Comparable utilities reviewed in this report administer occupancy-based adjustments through voluntary applications, staff review, online submission, documentation where required, privacy policies or document-handling rules, and renewal or reconfirmation in some programs. These examples demonstrate that conservation-oriented pricing, occupancy-based adjustments, verification or review procedures, administrative feasibility, and customer privacy can operate together within documented utility practice.

Based upon the evidence examined, this report does not recommend abandoning conservation-oriented residential rate structures or replacing existing pricing mechanisms. Nor does it recommend adoption of any specific occupancy formula, gallon allocation, or verification standard. Instead, the research supports a narrower conclusion. The available evidence demonstrates that a voluntary adjustment to the initial residential water allocation based on verified household occupancy is compatible with documented conservation practices and warrants evaluation through the New York Public Service Commission's established regulatory processes.

Accordingly, this report recommends that the New York State Public Service Commission evaluate the implementation of an optional adjustment to the initial residential water allocation based on verified household occupancy within future conservation-oriented residential rate proceedings involving New York's investor-owned water utilities. Any such evaluation should occur through the Commission's existing regulatory framework with participation by utilities, Department of Public Service Staff, consumer advocates, municipalities, and other interested parties. In keeping with the evidence-based approach reflected throughout this report, the purpose of that evaluation would be to determine—based upon documented research, customer data, and established administrative practices—whether implementation would further the public interest while preserving the conservation objectives that remain central to New York's water policy.

¹ New York State Public Service Commission, Order Adopting Joint Proposal as Modified and Establishing Rate Plan, Case 23-W-0111 (issued May 16, 2024); Joint Proposal, § XVIII, “Conservation & Efficiency Program,” Case 23-W-0111 (dated January 4, 2024); New York State Department of Environmental Conservation, “Water Use & Conservation”; U.S. Environmental Protection Agency, WaterSense, “Statistics and Facts.” Return to text

Research Question

The central research question examined throughout this report is:

Can conservation-oriented residential water rate design, an optional adjustment to the initial residential water allocation based on verified household occupancy, administrative feasibility, and customer privacy operate together within New York's existing regulatory framework?

In this report, “initial residential water allocation” refers to the amount of residential water use available at the initial rate before higher-priced conservation tiers apply. The shortened term “initial allocation” is used thereafter.

Rather than beginning with a predetermined policy outcome, the report approaches this question through documented evidence gathered from New York regulatory proceedings, government publications, utility policies, industry guidance, and comparable utility implementation.

Research Findings

The preceding chapters examined water conservation policy, conservation-oriented residential rate design, New York's regulatory framework, household occupancy, comparable utility implementation, and administrative feasibility. Based upon the evidence reviewed throughout this report, the following findings are supported by the documented research.

• Water conservation is an established public policy objective.
• Conservation-oriented residential rate structures encourage efficient water use through pricing.
• Conservation policy distinguishes between essential household water use and discretionary demand.
• Household occupancy is a significant determinant of ordinary residential water demand.
• New York's regulatory framework recognizes the importance of evaluating conservation-oriented rate structures using actual customer data.
• Comparable utilities have incorporated occupancy-based adjustments into conservation-oriented rate structures while preserving conservation objectives.
• Occupancy-based conservation programs have been administered through established utility practices.
• Conservation objectives, occupancy-based adjustments, verification or review procedures, administrative feasibility, and customer privacy are compatible within documented utility practice.
• The evidence identifies no inherent conflict between conservation-oriented residential rate design and the use of verified household occupancy to adjust the initial residential water allocation while preserving higher-priced conservation tiers.
• The evidence supports evaluation of whether an optional household-occupancy adjustment to the initial residential water allocation can be implemented within New York's existing conservation-oriented residential rate structures using documented customer usage and established administrative practices.

Recommendation for Commission Consideration

For that reason, the report recommends that the Public Service Commission evaluate an optional adjustment to the initial residential water allocation based on verified household occupancy in future residential water rate proceedings involving New York's investor-owned water utilities. Such an evaluation would allow the Commission to determine, based upon evidence developed through its existing regulatory processes, whether implementation would further the public interest while preserving the conservation objectives that remain central to New York's water policy.

Sources and Citation Note

This report is based primarily upon official regulatory, governmental, and utility sources. The research relies on New York Public Service Commission proceedings, Commission Orders, Joint Proposals, Department of Public Service materials, New York State Department of Environmental Conservation publications, United States Environmental Protection Agency guidance, utility policies and tariffs, and other official documents relevant to residential water conservation and rate design.

Comparative utility examples are included to illustrate documented conservation programs, administrative practices, and implementation approaches. These examples are presented for comparative research purposes only and should not be interpreted as legal precedent or as recommendations for automatic implementation within New York's regulatory framework.

Throughout the report, New York sources are given primary emphasis whenever available. Comparative sources are used to provide additional context or to illustrate documented implementation practices after the relevant New York regulatory framework has been established.

Direct quotations are used sparingly and only where the original language provides particular authority, precision, or regulatory significance. Unless otherwise indicated, factual statements are presented through accurate paraphrase supported by citations to the underlying source material.

The report distinguishes between Public Service Commission Orders, Department of Public Service Staff positions, Joint Proposals, utility filings, government publications, and comparative authorities. References to these materials are intended to accurately reflect the role each source plays within the regulatory process.

Research Accuracy and Corrections

This report draws on a broad review of official regulatory, governmental, utility, and industry sources. Care was taken to describe and cite those materials accurately. Minor typographical, citation-location, or source-description errors may nevertheless remain. Documented corrections may be sent to contact@waterratesny.org. WaterRatesNY will verify reported issues and note whether any correction affects a finding or conclusion.