A new three-tier rate system for Peterborough residents and businesses who use public water and sewers was approved by the Select Board Tuesday to encourage water conservation and shift some of the financial burden for water to bigger users in town.

“The last time we set rates was 2018,” said Town Administrator Nicole MacStay. “The goal of the project is to allow the board have a reliable rate-setting model to set rates based on budget needs, future projects, set targets, provide data to estimate the impact of rates on differentiated household types and allows for a tiered system based on user consumption and given consumers more control over their own bills.”

“There is currently a one-tier structure, and a multi-tiered system allows different rates for different usage brackets, incentivizes water conservation, and shifts more of a burden to high users,” said Pareena Deva of Comprehensive Environmental Incorporated who presented the rate-setting models.

The current one-tier charge per cubic foot (cf) of water is $0.1046 for all users. Per MacStay, the new structure reduces the minimum use per cubic foot (cf) from 450 cf to 300 cf, and sets the usage rates above the minimum usage as follows.

Between 300 and 1,000 cubic feet, the water rate is $0.0891 per cubic foot and the sewer rate is $0.1207; for usage between 1,001 and 6,000 cubic feet, the water rate moves to $0.1089 and the sewer rate is $0.1434; for usage of 6,001 cubic feet and above, the water rate is $0.1145 and the sewer rate is $0.1749.

MacStay added that “The average four-person household uses approximately 3,000 cf of water per year.”

Assistant Town Administrator Seth McLean said during the meeting that “there have been many requests over the years that the Town adopt a tiered-rate system that would encourage water conservation. We have also heard from many utilities customers that they are frustrated that because they only pay the minimum bill, no amount of effort on their part to reduce water usage is ever reflected in their bill.”

“By reducing the minimum bill and implementing a tiered-rate system, this new rate model will both encourage conservation and give customers more control over their utilities’ bill,” said MacStay. She added that the current rate system does not meet the town’s needs, requiring the town to dip into fund balances to meet costs.

David Odland of the Budget Committee said that the condition of the town’s older infrastructure will make certain updates inevitable. “Probably $20 million dollars (in costs) over the next 20-30 years,” said Odland. “This would only cover new water and sewer pipes, not a new water tank,” he said.

“Our ultimate goal is to get people to conserve water,” said board member Bill Kennedy.