The Region's Fixed Infrastructure Cost
Consumption vs. Increases in Cost Per Unit
The cost to operate the Region's water system is 90 per cent fixed.
It's like renting a car for a day; a $100 rental fee is charged to you regardless of how much gas you use or how many kilometres you drive.
In the case of water rates, costs for infrastructure like water and sewage treatment plants are similar to the car rental fee - they need to be covered regardless of how much they are used.
Explaining Niagara's Water Rates
Due to the way the Region covers its costs, the decrease in consumption (from conservation efforts or rainy summers) means the amount of money charged per litre has to increase to cover the fixed costs. To recoup these costs, the water rate increases.