Balancing Water Tariff Design: Revenue vs. Affordability
Analyze tradeoffs between tariff structures to achieve financial sustainability while maintaining equity and affordability
You are a water utility manager in a mid-sized city facing a budget shortfall. Current flat-rate tariffs (12 units/month) cover only 65% of operational and capital costs. You must design a new pricing model within 3 decisions. How will you structure the primary tariff mechanism? How will you address affordability concerns from volumetric pricing? What level will you set the fixed monthly charge? How will you ensure long-term capital replacement funding? OUTCOME: Your model achieves 80%+ cost recovery while protecting low-income users. Infrastructure replacement is funded. What is your next priority? OUTCOME: Your model reaches 75-80% recovery—operational sustainability achieved, but…
Sign up free — one personalized lesson every day, matched to your role and goals.
Already have an account? Sign in