Water Rates Explained: Base Charges, Tiers, Seasonal Pricing, and CCF

Two kinds of charges

Almost every water bill mixes two kinds of charges. A fixed charge, sometimes called a base, service, meter, or customer charge, stays the same each billing period. It helps pay for meters, billing, and the system. A variable charge, sometimes called a usage, volume, or commodity charge, depends on how much water the meter recorded.

This split explains a common surprise. If you cut your water use in half, your bill will usually not fall by half, because the fixed charge stays the same. The more of your bill that is fixed, the less your conservation shows up in dollars.

The units: gallons, thousands of gallons, and CCF

Utilities measure water in different units. Many use gallons or thousands of gallons. Many others use CCF, which stands for hundred cubic feet and is also written HCF. EPA says one CCF equals 748 gallons.

Always check the unit before comparing bills or rates. A bill that says “8” could mean 8,000 gallons or 8 CCF, which is 5,984 gallons. If the rate is quoted per CCF, multiply your CCF by that rate. Convert to gallons only when you want to compare with something measured in gallons.

• CCF to gallons: multiply by 748.
• Gallons to CCF: divide by 748.
• 1,000 gallons is about 1.34 CCF.
• Price per CCF to price per 1,000 gallons: multiply by about 1.337.

The main rate structures

EPA’s WaterSense program describes several common ways utilities price water. Your bill or your utility’s rate page will tell you which one applies, and some utilities combine them.

• Uniform rate: the same price for every unit, all year.
• Increasing block (tiered) rates: each block of use costs more per unit than the block before it. EPA says these are meant to encourage conservation.
• Declining block rates: each block costs less per unit. EPA says these are found mostly in rural areas with large farming populations, or where there are large users such as heavy industry and water is plentiful.
• Seasonal rates: higher prices during peak months, usually summer, and lower prices in winter.
• Drought rates: prices that rise with the local drought level.
• Water budget rates: each household gets a water budget based on factors like household size or lot size, with a higher price above the budget.

A real example: Denver Water’s 2026 rates

Denver Water’s 2026 rates for residential customers inside the city show how tiers work in practice. For meters read on or after January 1, 2026, the fixed monthly charge for the common 5/8-inch and 3/4-inch meters is $20.91.

The tiers are personal. Tier 1 runs from zero up to your average winter consumption, or AWC. Denver calculates AWC from each customer’s billed use from January through March, with a minimum of 5,000 gallons and a maximum of 15,000 gallons. Tier 1 costs $3.02 per 1,000 gallons. Tier 2 covers the next 15,000 gallons above your AWC at $5.44 per 1,000 gallons. Anything beyond that is Tier 3 at $7.25 per 1,000 gallons.

Denver also added temporary drought surcharges to Tiers 2 and 3. They apply starting with May water use and run through April 30, 2027, unless the board acts sooner. With the surcharge, Tier 2 is $6.54 and Tier 3 is $9.45 per 1,000 gallons.

Working through a bill with those rates

Here is an illustration using Denver’s published rates and a made-up customer. Their average winter use is 6,000 gallons. In July they use 25,000 gallons, and the drought surcharge is in effect.

Tier 1 covers the first 6,000 gallons: 6 × $3.02 = $18.12. Tier 2 covers the next 15,000 gallons: 15 × $6.54 = $98.10. Tier 3 covers the last 4,000 gallons: 4 × $9.45 = $37.80. Add the $20.91 fixed charge, and the water portion is $174.93. This leaves out sewer and any other charges on the bill.

Now suppose the same customer cuts 4,000 gallons of lawn watering. The whole saving comes out of Tier 3, so the bill falls by $37.80. Cutting the same 4,000 gallons in winter, when all use is in Tier 1, would save only $12.08. That is why outdoor summer use is usually the best place to save money under tiered rates.

How to read your own rate table

Find your utility’s current rate schedule on its official website. Your profile in our directory links to the official site. Check the effective date, then find the table for your customer class, usually “residential” or “single-family.”

Write down the fixed charge for your meter size, the unit, and each tier’s range and price. Then rebuild your last bill: fill the tiers in order, multiply, and add the fixed charge. If your result is far from the bill, check for sewer or other charges, a different meter size, or a rate change partway through the billing period.

What this means for saving money

Under tiered or seasonal rates, the last gallons you use each month are the most expensive. Those are often outdoor gallons. Adjusting irrigation timers, fixing broken sprinkler heads, and watering only on allowed days usually save more money than the same effort indoors.

Leaks matter more under tiered rates too. A leak adds gallons every day, and those gallons can push the rest of your use into a higher tier. EPA says fixing easily corrected household leaks can save about 10 percent on water bills.

Remember the sewer side

Sewer charges often depend on water use, but they may be calculated differently. Some utilities cap residential sewer volume at a winter average, so summer lawn water is not billed as sewage. Oklahoma City, for example, uses December through February to set a residential sewer cap that starts in April. Our guides on winter averaging and on sewer and stormwater charges explain this in more detail.