Because I push water pricing so hard, I ought to acknowledge that Austin has had a sensible rate structure since November 2008. Austin Water Utility uses an inclining, four-block rate structure for residential customers. "Heavy" water users pay quite steep rates. I put "heavy" in quotes because the top rate -- $8.50/1,000 gallons -- kicks in at 15,000 gallons/month, which isn't that much for a suburbanite trying to keep his lawn green during a month-long string of 100+ degree days. And AWU just received approval to raise rates again on November 1, 2009. Residential users who exceed 25,000 gallons/month will pay $10/1,000 gallons.
As this AWU chart illustrates, Austin charges its customers much more than peer cities:
(The choice of peer cities seemed random so I spot checked a couple of other cities just to make sure AWU isn't cherry-picking. It doesn't seem to be: Houston charges just $4.50 per 1,000 gallons beginning at 12,000 gallons/month. Denver has a top rate of $7.63 that kicks in at 40,000 gallons/month.)
Austin's water rates are also progressive, as the next two AWU charts illustrate. The blue lines represent the average historical monthly bills for residents who used an average of 8,500 gallons/per month or 30,000 gallons/month, respectively. The red lines represent what the average bills would have been had AWU raised rates uniformly for all customers.
Thanks to the progressive rate structure, customers who use a relatively modest 8,500 gallons/month have seen much more modest rate increases; heavy water users have born the brunt of the increases. Suburbanites pay for those 1/2-acre spreads of St. Augustine.
It is quite possible that we now are doing enough. Peak-day rates have trended down the last couple of years. I doubt the November 2008 rates have even had their their maximum impact yet; water customers are notoriously slow to react to new rate structures. And, of course, customers will face another rate increase this November. These rate increases, combined with the mandatory watering restrictions, might be enough to keep us below the peak-day threshold for a long time.