Costs Generally, water provided for urban needs costs more than that for agriculture. This is because urban supply systems are more complex. To meet domestic water quality standards, urban systems often involve costly local facilities for system regulation, treatment plants, distribution systems, water meters, and system operation, including meter reading and customer billing. In addition, some water prices include costs for waste water treatment. However, agricultural water prices are at the farm head gate , or edge of property, and seldom need treatment.
Farmers incur additional costs to distribute water supplies throughout their farms.
Water treatment costs can be a significant component of total water costs to urban water agencies. Amendments to these acts may significantly increase future water treatment costs because of more stringent water quality standards. During years of normal or above-normal precipitation, most agencies' supplies are adequate to meet current demands. But drought years can significantly disrupt the availability of water and can affect agency water rates. Several even implemented drought penalty rates designed to drastically reduce water use.