Stratifying the Staircase: Residential Water User Segmentation Under Increasing Block Rate Pricing Structure

Abstract

Improvements in residential water efficiency and increasingly stressed water supplies continue to reduce the margin of error in which water utilities are able to operate. Expectations for increased temperatures and the occurrence of extreme weather events increases the need for water utilities to be able to adapt operations to account for changes in the future. This article introduces a probabilistic technique for segmenting single-family residential water users into consumption groups based on consumption behavior and price thresholds imposed by an increasing block rate pricing structure. Strategic segmentation of users allows for more precise analysis of exogenous influences on consumption behavior.