4.2. WATER FEES

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Water fees take various forms, including user fees (for groundwater, surface water, or for drinking water supplied by waterworks) and fees for direct or indirect water discharges. Indirect discharges are sent to treatment works. The rationale for water user fees is that water is not a free good but rather a scarce resource that should be priced to avoid inefficient use that can cause environmental problems. EPA (March 1991), p. 4-6. The rationale for discharge fees follows from the polluter pays principle as described above. Most water fees are intended primarily to raise revenue to recover the costs of providing service and are not employed to allocate a scarce resource among competing interests. User fees based on consumption and discharge fees based on volume or toxicity may have some incentive effect.

4.2. WATER FEES

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