13.3.1 Reduction of water tariffs
Water tariffs should be reviewed annually, because customers find small increases in water costs easier to cope with and accept than a large increase every few years. However, it is possible that water tariffs may be reduced with time. If water sales go up, the fixed costs per cubic metre of water produced will be reduced. If non-revenue water is minimised, this will serve to increase the available supply and the income to the water supplier. Increased usage can be achieved by increasing the number of customers, through installing more taps.
Can you remember what non-revenue water is, and what its biggest component is?
From Study Session 7, it is water that is used but does not generate any income for the water supplier; its biggest component is leakage.
Water tariffs may also be reduced if the income to the water supplier is increased through more efficient billing and collection of payments due.
13.3 How water tariffs are set