78 THE MINIMUM RATE 



consumers were eliminated from consideration in the bills by 

 the method of minimum rates. It is a matter of experience that 

 the conditions and cost of service for that half of the domestic 

 takers using the smallest quantities of water are not uniform. 

 Instead there are very considerable divergences that might well 

 be taken into account in fixing the rates. 



The muiimum introduces irregularities into the charges for 

 different quantities that cannot be justified. Under it a service 

 using 100 gallons per day pays no more than a service taking 20 

 gallons per day, but it is obvious that it costs more to supply it 

 and there is a presumption that the service has greater value to 

 the taker. Certainly on the ordinary basis of distributing the 

 burden according to cost and value of the service, a taker draw- 

 ing 100 gallons per day should pay somewhat more than one draw- 

 ing only 20 gallons per day. 



On the other hand, where the service and meter are furnished 

 by the works, as is now common, and is rapidly becoming still 

 more common, and when the costs of maintaining the service 

 pipe and meter and of reading the meter and billing are taken 

 into account, the water-works system frequently realizes a smaller 

 absolute return from those consumers taking amounts of water 

 near the limit represented by the minimum than it does for either 

 smaller or larger takers. 



To illustrate: If the annual cost to the department for the 

 service pipe and meter and of reading the meter and billing and 

 collecting and all incidental expenses, but not including water, 

 is $4, and if the minimum rate is $8, then from a consumer using 

 the exact amount of water permitted under the minimum rate 

 the collections are $8, the direct expenses are $4, and the amount 

 left to the water works which may be considered as income from 

 the sale of water is $4. If another consumer uses twice as much 

 water and pays $16, the expenses for a similar service will be the 

 same or $4, and the net income to the works from the sale of water 

 is $12, or three times as much. The return from twice as much 

 water is three times as great. In other words a consumer using 

 the smaller quantity of water, which is the maximum amount 

 permitted under the minimum, gets his water at two-thirds of 



