Essential Household Water Use Within Conservation Policy

Having established that water conservation is a fundamental public policy objective and that tiered residential water rates represent one of the principal tools used to encourage efficient water use, an important question remains: What types of water use are conservation-oriented rate structures actually intended to influence?

The answer is not simply "less water use." Modern conservation policy recognizes that different residential water uses serve different purposes. Some uses are essential to health, sanitation, and ordinary household living, while others provide greater opportunities for voluntary conservation. Understanding this distinction is important because conservation-oriented rate design seeks to reduce unnecessary demand without discouraging the reasonable use of water required for everyday life.

Essential household water use includes activities that are fundamental to maintaining health, safety, and ordinary living conditions. Drinking, food preparation, cooking, bathing, personal hygiene, sanitation, and laundry are all routine activities that require water regardless of season or individual lifestyle. Although households may improve efficiency by installing water-saving fixtures or appliances, these activities cannot be eliminated without affecting basic living standards.

For this reason, conservation programs generally do not seek to discourage essential household water use itself. Instead, many conservation initiatives focus on improving the efficiency with which essential water is used. Public education encourages shorter shower times, prompt leak repairs, and efficient household practices. Rebate programs promote the installation of high-efficiency toilets, showerheads, clothes washers, and other fixtures that reduce water consumption while maintaining the same essential household functions. The objective is not to reduce access to necessary water, but to reduce the amount of water required to accomplish those activities.

Other residential water uses often provide greater opportunities for voluntary conservation. Depending on local conditions, climate, and customer circumstances, examples may include portions of seasonal landscape irrigation, ornamental watering, or other discretionary outdoor uses. Unlike essential household consumption, these uses can frequently be reduced, rescheduled, or managed more efficiently without affecting basic health or sanitation. As a result, conservation policies often place greater emphasis on influencing discretionary demand where customers have greater flexibility to change their water use.

This distinction is reflected throughout the water industry. Federal guidance from the U.S. Environmental Protection Agency emphasizes improving water-use efficiency rather than limiting essential household needs. Similarly, industry organizations such as the American Water Works Association distinguish between indoor household consumption and outdoor demand when evaluating residential water use and conservation practices. Although individual utilities may adopt different conservation strategies depending upon local conditions, the underlying objective remains consistent: encourage efficient water use while maintaining reliable access to water required for ordinary household life.¹⁴

The distinction between essential and discretionary water use also helps explain why many conservation-oriented rate structures rely upon progressively higher prices as consumption increases. As discussed in the previous chapter, inclining block rates do not reduce the price of essential water use. Rather, they increase the price of additional consumption beyond an initial allocation. In doing so, the rate structure seeks to encourage customers to reduce water use where greater flexibility exists while preserving ordinary household consumption within the initial tier.

The New York Public Service Commission's own proceedings reinforce this distinction. In approving Veolia Water New York's conservation-oriented residential rate structure, the Commission explained not only that the inclining block rates were designed to discourage discretionary usage, but also that the highest residential rate block was "intended to approximate discretionary seasonal usage."¹⁵ This description is significant because it confirms that the highest conservation tier was designed to influence water use beyond ordinary household needs rather than essential day-to-day consumption.

New York's recent regulatory proceedings demonstrate that this distinction is more than a theoretical concept. Liberty Utilities' Threshold Analysis, required as part of the Commission-approved Joint Proposal in Case 23-W-0235, specifically examined residential customers reaching Tier 4 during non-peak months, when outdoor irrigation would be expected to be substantially lower. By focusing on October through April and examining customers whose consumption appeared to consist primarily of indoor water use, the study sought to determine whether the highest conservation rate block was affecting households whose water use could not reasonably be attributed to seasonal outdoor demand.¹⁶

The Threshold Analysis did not assume that every instance of higher residential water use reflected discretionary consumption. Instead, it recognized the importance of examining actual usage patterns before drawing conclusions. Liberty evaluated multiple years of billing information, reviewed customer accounts, considered census data, examined available property information, and analyzed household water-use estimates derived from American Water Works Association data. The study further acknowledged that, if indoor-only water use were found to be reaching Tier 4, additional study could be undertaken in consultation with Department of Public Service Staff. This structured approach reflects an important principle of conservation policy: effective conservation should be informed by evidence rather than assumptions.¹⁷

Equally important, the Threshold Analysis demonstrates that New York's regulatory framework already recognizes the value of distinguishing between different patterns of residential water use. Rather than treating all higher consumption identically, the Commission-approved process required further examination of situations where indoor household demand alone might be associated with the highest conservation tier. The purpose of that analysis was not to weaken conservation objectives, but to better understand how conservation-oriented rate structures were operating in practice.

Understanding this distinction provides the foundation for examining New York's current residential conservation rate structure. Having established the broader conservation principles, the purpose of tiered rates, and the importance of distinguishing between essential household use and discretionary demand, the report now turns to the manner in which these principles have been incorporated into New York's current residential water rate framework.