Understanding Your Water Bill: Changes Coming in January 2027

The City of Santa Fe is preparing to introduce a new three-tier water rate structure for residential customers beginning in January 2027. The change is designed to encourage water conservation, make essential water use more affordable, and simplify billing.

The new structure is separate from the City's phased water rate increases. Understanding both changes can help residents prepare for their future water bills.

What's changing?

Currently, residential customers are billed under a two-tier system, with different usage thresholds by season.

Beginning in January, the City plans to use three pricing tiers year-round.

The new residential water usage rates will be:

• Tier 1: First 4,000 gallons per month
  $5.50 per 1,000 gallons

• Tier 2: Next 3,000 gallons per month
  $8.30 per 1,000 gallons

• Tier 3: Usage above 7,000 gallons per month
  $23.50 per 1,000 gallons

How does tiered billing work?

Water is billed in stages. Customers pay the lowest rate for their first 4,000 gallons, the second-tier rate for the next 3,000 gallons, and the third-tier rate only for usage above 7,000 gallons.

For example: If a household uses 5,000 gallons in one month, the first 4,000 gallons are billed at the Tier 1 rate. Only the remaining 1,000 gallons are billed at the Tier 2 rate.

The monthly service charge, which is based on meter size, remains a separate part of the water bill.

Why is the City making these changes?

Water rates had remained unchanged since 2013, while the costs of maintaining infrastructure and providing reliable water service continued to rise.

The City's phased rate increases are intended to support necessary water system investments.

The new three-tier structure serves a different purpose: encouraging conservation and making lower levels of water use more affordable.

What does this mean for my bill?

The impact will depend on how much water your household uses.

Customers who use less water may benefit from the discounted first tier, while customers with higher usage may see increased charges.

The new structure does not mean that every customer's bill will increase by the same amount. Actual charges depend on water usage, meter size, and applicable rates.

Learn more

The City encourages residents to review the new pricing structure and their monthly water usage before the changes take effect.

For more information about City water services and rates, visit City of Santa Fe Public Utilities.