Griffin cited examples of the use of pricing to set water rates. The strategy is to redesign water rates so they reflect the actual opportunity costs of water use. They reward conservation and penalize waste in the right amount so there are fewer shortages. Collinge points out that this source of revenue would be efficient and not taxing upon the poor. However, municipal water utilities are often bound by law or custom to operate in a revenue-neutral manner.
Utilities can still capture the advantages of market clearing prices.
Market clearing could be incorporated into current utility practices by issuing discount coupons to customers, which they could market to others. Collinge favors the use of feebates, in which fees for excessive water use are combined with rebates for those who conserve. The effect of the fees and rebates would be revenue neutral, but still save water. Gregg described efforts to survey 3,000 Texas water users in Austin, Corpus Christi, and San Antonio about subjects pertaining to water use and pricing. Later, that information was fitted to 1990-97 water use data for these cities.