IRWD Board in 1991. IRWD’s budget-based rate structure successfully promotes ongoing conservation and provides IRWD with revenue stability. It provides a revenue source for IRWD’s ongoing water use efficiency programs, while providing customers with rates among the lowest in Orange County.
A. Budget-Based Rate Structure
In 1991, IRWD’s budget-based rate structure was instituted to promote the efficient use of water and is designed to provide customers with a significant economic incentive to use reasonable amounts of water to serve indoor, landscape, commercial/industrial and institutional demands. This incentivized effort is accomplished by setting a customized monthly water budget for each customer account that is based upon a variety of factors such as: irrigated area, daily weather characteristics, number of residents, industrial or commercial business type, and other more unique characteristics such as the presence of a pool, livestock or specialized industrial equipment. The basis for customer water budgets were reviewed and updated in 2016 at the end of the statewide drought to reflect changes in plumbing codes and water use efficiency practices. Water is sold to customers under a four-tier structure based upon their monthly water budget which varies for landscape use relative to weather patterns. Customers, using water within budget, purchase water in the lower two tiers and are rewarded with very low water bills. Customers using in excess of their budget also purchase water in one to two steeply ascending upper tiers, resulting in relatively high-water bills and a strong pricing signal to reduce excessive use. The rates in each tier of IRWD’s budget-based rate structure are based on cost of service. IRWD’s 2025 domestic residential commodity rates, for each of the four tiers, are shown below in Table 9-1 .
Table 9 - 1. IRWD Domestic Residential Commodity Rates, Approved FY 2025-2026
Customer Tier
Percent of Budget
Rate Per CCF
Low Volume
0 – 40%
$2.07 $2.72 $7.51
Base Rate Inefficient Wasteful
41 – 100% 101 – 140%
141% +
$18.60
B. Revenue Stability
IRWD also assesses monthly fixed charges based upon meter size. These fixed charges provide adequate funding for all IRWD operating costs other than the water commodity itself and the District’s water use efficiency and related programs. As such, IRWD enjoys revenue stability regardless of the amount of water sold or the degree of conservation experienced from customers’ water use efficiency practices.
9 - 2
IRWD – 2025 Urban Water Management Plan
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