Most residential customers and all other customer classes (industrial, commercial, public authority, etc.) receive service under a metered rate schedule consisting of a service charge and a quantity rate. Service charges (also known as Readiness-to-Serve charges) are designed to recover 50% of the utility's fixed costs. Since this rate recovers fixed costs, which the utility incurs regardless of the amount of water sold, customers are billed the service charge even when no water is consumed. Often the monthly service charge is mistakenly referred to as a meter charge. Not only is this designation incorrect, but meter-related costs including meter reading and billing do not fully reflect the costs (shown above) that service charges are designed to recover.

Quantity rates, expressed in $/Ccf (100 cubic feet), recover all remaining costs (variable costs plus 50% of the fixed costs). As consumption increases, so does the customer's bill. Generally, all customers of a water utility pay the same quantity rates, which do not vary with the amount of water used. However, in areas with a severe water supply shortage, two or more quantity rate blocks may be established to encourage conservation. For these areas, the quantity rates increase with increased water consumption, such that the more the customer uses, the higher the quantity rate.

In addition to metered rate schedules, some utilities have residential flat rate schedules that do not have a quantity rate component. Flat rate customers are charged the same rate regardless of usage. However, flat rates can vary by customer based on lot size. During the last drought (early 1990s), legislation was signed to encourage conservation by requiring all new service connections to be metered rather than flat rate.

The rates for fire service lines are also a form of flat rate service, with the rate based upon the size of the fire service line. Since water consumption occurs only when there is a fire, metering this service is impractical.

Additionally, some utilities have reclaimed water metered rate schedules. Reclaimed (or recycled) water is wastewater that has been treated for reuse, but not for potable consumption. Because of its high infrastructure costs and restricted uses, reclaimed water is only available in limited areas through specially color-coded water pipes. Generally, irrigation and industrial customers use reclaimed water. Wholesale water agencies often price reclaimed water below wholesale potable water rates to encourage its use and allow customers to recover on-site infrastructure conversion costs.

Service Charge Ratios
Service charges (which recover 50% of the utility's fixed costs - see above) are determined by the Commission based on meter size. The Commission's Water Branch Memorandum dated January 18, 1991 (pursuant to D.85-06-064) contains the following meter ratios:

Accordingly, if the monthly charge for a 5/8" x 3/4" meter is $5, the monthly charge for a 1" meter should be $12.50 ($5 x 2.5).

Fire Services
Fire protection service is the provision of sufficient water at minimum pressures over specific time periods for controlling and extinguishing fires. Every water utility must stand ready to meet the demands of a large fire. To make this service available, utilities construct large networks of water supply facilities, including hydrants, mains, supply sources, pumps, storage reservoirs and appurtenances.

Fire Protection Standards
The Commission has established fire flow requirements for California's investor-owned utilities. In setting the following standards, the Commission is aware of special conditions that might be faced by local fire protection agencies. Therefore, local fire flow standards preempt the following standards, whether higher or lower.