Generally, most of the revenues of a water and sewer utility are in the form of user charges. These charges are measured and accounted for by water meters. Water usage is calculated on a monthly basis (normally) and this usage is applied to the city’s water rates.
Cities will use an ascending or increasing-block rate schedule when there is a need to encourage water conservation as a result of increased demand on a dwindling water supply.
In many cities sewer charges are based on water usage amounts determined from meter readings. If the city provides only sewer service it will obtain the usage amounts from the utility districts or whoever is providing water service. In the past, sewer charges were typically structured similar to water rates, although in some cities the sewer rate was expressed as a percentage of the water bill. Today, for many utilities sewer charges are now higher than water charges as the costs of meeting all the requirements of operating a sewer system have increased dramatically. In addition, sewer rate structures typically may use increasing block rates.