Time of use tariffs: reforming the economics of urban water supply
Waterlines report No 63 - October 2011
The research investigated the potential application of time of use tariffs to reduce peak hour demand using hourly water consumption data collected by smart meters in Hervey Bay, Queensland, in 2008-09.
The research found a reasonable contribution to peak hour demand by outdoor use, which is considered the most price elastic consumption. However, this usage was concentrated on a very small proportion of the sample population. Because of this, the research recommended an hourly inclining block tariff instead of a time of use tariff.
Modelled potential capital savings from reduced peak hour demand were very small and case specific. The study found the proposed tariff met regulatory requirements. A small survey among potential tariff recipients found strong willingness to restrict consumption to avoid penalty charges and interest in participating in educational campaigns.
This report has been prepared for the National Water Commission by Graham Cole, as part of the Commission's Fellowship program. The Fellowship Program was established to support implementation of the National Water Initiative by developing future leaders for Australia's water sector who can advance water-related knowledge and build industry capacity.
Documents for download
Time of use tariffs: reforming the economics of urban water supply (PDF 2.22MB)
Time of use tariffs: reforming the economics of urban water supply (DOC 2.75MB)