Water and Sewer Terminology

Below are definitions of terms commonly used in the water and sewer industry. This list is not designed to be comprehensive, but rather to give a basic definition. Some of these terms have specific regulatory or technical definitions as spelled out in law or statute. In those situations, the legal or technical definition takes precedence.
Annual operating revenue requirement: The total revenues required on an annual basis adequate to meet all expenses and capital requirements of the utility.

Backflow: The backing up of water through a conduit or channel in the direction opposite to normal flow.

Base costs: Cash, materials, supplies and other similar current assets necessary in the operation of the enterprise. It is usually measured by the excess of current assets over the current liabilities, or sometimes as a percentage of annual operation and maintenance expense levels.




Capital expenditures:

Check valve:


Commodity costs (variable costs):

Company service line:


Connection charge:

Contribution in aid of construction (CIAC):  Any amount of money, services or property received by a water utility from any person or governmental agency that is provided at no cost to the utility. It represents an addition or transfer to the capital of the utility and is used to offset the acquisition, improvement or construction costs of the utility's property used to provide utility services to the public. Contributions received from governmental agencies and others for relocation of water mains or other plant facilities are considered CIAC.

Costs of service:

Cross connection:

Customer classification:

Customer costs:

Customer service line:


Declining-block rates:

Demand costs:

Demand patterns:


Depreciation rate:

Distribution system:

Dividend payment:

Dry tap:


Elevated tank:





Fire-protection charges:

Frost line:

Government-owned water utility:

Ground water:



Inverted block rates:

Investor-owned utility:

Leak survey:

Lifeline rates:


Minimum bill:

Minimum flow:

Operating expenses:

Off-peak rates:

Overflow rate:

Peak-load pricing rates:


Potable water:

Pressure regulator:

Private utility:

Rate base:

Rate blocks:

Rate-making process:

Rate of flow:

Rate schedule:

Raw water:

Reclaimed water:

Relief valve:



Return on rate base:


Seasonal excess-use charges:

Seasonal rates:

Service charge:

Service connection:

Special assessment:

Standby service:

Stand pipe:

Test year:

Treated water:

Unit of service:

Uniform volume charge:

Unmetered or flat rate:

Valve:Water quality:

Water system:

Water table:


Wholesale service customers:

Working capital:

A vertical drilled hole into an underground formation, usually to obtain a source of water, to monitor ground water quality or to determine the position of the water table.

The upper surface of the zone of saturation, except where that surface is formed by any impermeable body. Collectively, all of the property involved in the operation of a water utility, including land, water lines and connections, pumping stations, treatment plants and general property. The chemical, physical and biological characteristics of water with respect to its suitability for a particular purpose. The same water may be of good quality for one purpose or use, and bad for another, depending on its characteristics and the requirements for the particular use. A device installed in a pipeline to control the magnitude and direction of the flow. It consists essentially of a shell and a disk or plug fitted to the shell. A fixed charge for unmetered service, often simply based on the number of fixtures and water-using devices of the customer. A single charge per unit of volume for all water used. An element of service for which a cost can be ascertained, such as thousand gallons, hundred cubic feet, million gallons per day, monthly bill, etc. Water that has been obtained from supply sources and treated to produce potable water. The annualized period for which costs are to be analyzed and rates established. (1) A pipe or tank connected to a closed conduit and extending to or above the hydraulic grade line of the conduit. It is often, installed to afford relief from surges of pressure in pipelines. (2) A tank resting or on the ground having height greater than diameter and used for storage of water in distribution system. Service provided occasionally under certain defined conditions, such as in the event of failure of the customer's normal water supply system. Fire protection is another form of standby service. A direct tax levy assessed against property to pay for improvements, which ordinarily are a direct benefit to the property itself. Means the connection of the water company's service line with the customer's service line at or near the property line, thereby enabling the customer to receive service. A fixed charge usually designed to recover customer costs. Rates based on the cost of service variations with respect to system seasonal requirements. For example, higher rates may be charged during the summer months when a system peak occurs, which requires facilities not needed to meet lower winter loads. Charges for usage above pre-established levels, typically used during periods of peak use relative to use during off-peak periods. The condition of a liquid when it has taken into solution the maximum possible quantity of a given substance at a given temperature and pressure. The percentage of earnings on the rate base. A pond, lake, tank, basin or other space, either natural or created in whole or in part by the building of engineering structures, which is used for storage, regulation and control of water. Sometimes called impoundment. An element of maintenance, as distinguished from replacement or retirement. A valve that releases air from a pipeline automatically without loss of water or introduces air into a line automatically if internal pressure becomes less than that of the atmosphere. Recycled water that has been treated to remove harmful contaminants that can be used for non-potable purposes such as watering lawns, common areas or golf courses. Water that is obtained directly from the supply sources, such as wells, reservoirs, rivers, etc. that has not been treated to produce potable water. Schedule of the rates and charges to the various customer classes and customers. The rate of flow of water, silt or other mobile substance, which emerges from an opening, pump, or turbine or passes along a conduit or channel, usually expressed as cubic feet per second, gallons per minute or million gallons per day. The process of developing and establishing rates and charges. The process is comprised of four phases: (1) determination of revenue requirements; (2) allocation of costs to the functional components of the cost of service; (3) distribution of the function costs of service to customer classes; and (4) development and design of a schedule of rates and charges to recover the revenue requirements. Elements of a schedule of charges for specific usages within certain defined volume and/or demand boundaries. The value of a water utility's property used in computing an authorized return under the applicable laws and/or regulatory policies of the agency setting rates for the utility. An enterprise owned by private individuals or a corporation and operated for the purpose of rendering utility service. Private water and sewer companies are regulated by the Arizona Corporation Commission. A device for controlling pressure in a pipeline or pressurized tank, such as a pressure-regulating valve or a pump drive-speed controller. Water that is considered safe for consumption and does not contain objectional pollution, contamination, minerals or infective agents. Pipes jointed to provide a conduit through which fluids flow. A multiple-part rate structure in which charges vary and are based on the higher costs of providing water during the system peak periods of use and on the lower cost of providing water during the system off-peak periods. One of the criteria for the design of settling tanks in treatment plants; expressed in gallons per day per square foot of surface area in the settling tank. Rates charged for usage during certain designated off-peak periods. Expenses necessary for the maintenance, operation and collection of revenue for a specific utility. Some business expenses are excluded from the operating expense category for rate-making purposes if such expenses are not related to the provision of service. The flow occurring in a stream during the driest period of the year. Also called low flow. A minimum charge to a customer that includes a fixed volume of water delivered to the customer during the applicable period of time. The upkeep necessary for efficient operation of physical properties. It involves labor and materials, but is not to be confused with replacement or retirement. Discounted water rates that apply to specific, qualified low-income individuals. A search for leaks in the system, usually done when percentage of unaccounted for water is high. A utility owned by an individual, partnership, corporation or other qualified entity with equity provided by shareholders. These types of utilities are regulated by the Arizona Corporation Commission. A schedule of rates applicable to blocks of increasing usage in which the usage in each succeeding block is charged at a higher unit rate than in the previous blocks. Generally, each successive block rate may be applicable to a greater volume of water delivery than the preceding block(s). Water, wastewater or other liquid flowing into a reservoir, basin or treatment plant. The quantity of groundwater that leaks into a pipe through joints, porous walls, or breaks. Water existing beneath the earth in confined or unconfined aquifers. A water utility created by state or other government agency or legislative action with the mandate that the purposes of the utility are public purposes and that its functions are essential governmental proprietary functions. Its primary purpose is to provide its designated service area with potable water in an adequate supply at reasonable costs that people of the area may promote their health, safety and welfare. A government-owned water utility may be part of a municipal government operation, a county agency, a regional authority or take another form that is appropriate for its service area. The depth to which the soil will freeze in an area. Charges made to recover the cost of providing fire-protection service to the area served by the utility. (I) The movement of a stream of water or other mobile substance from place to place; a stream of water; movement of silt, water sand or other material. (2) The fluid which is in motion. The process of passing a liquid through a filtering medium (which may consist of granular material, such as sand, magnetite, or diatomaceous earth, finely woven cloth, unglazed porcelain or specially prepared paper) for the removal of suspended or colloidal matter. Amounts paid or incurred for all purposes, including expenses and capital outlays. Environmental Protection Agency. A tank used for storage in a water distribution system, which is raised above the surface of the ground and is supported by posts of columns. An acquired legal right to the use of land owned by others. Ordinarily more restricted in scope than leasehold. A connection made to a main that is empty. Payment made by an investor-owned water utility to its shareholders, based on its earnings. The network through which water is distributed to consumers. The term applies particularly to the network or pipelines in the streets in a domestic water system and or to pipes and canals other than the main canal in an irrigation system. The annual rate at which capital facilities are depreciated, based on the estimated loss in value of the facilities, not restored by current maintenance, that occurs in the property due to wear and tear, decay, inadequacy and obsolescence. It provides for the recovery of a utility's capital investment over the anticipated useful life of the depreciable assets. The loss in service value not restored by current maintenance as applied to depreciable plant facilities. Depreciation is incurred in connection with the consumption or prospective retirement of plant facilities in the course of providing service. This depreciation is the result of causes known to be in current operation and against which the utility is not protected by insurance. Among the causes are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in technology, changes in demand and requirements of public authorities. Profiles and characteristics of the demand requirements of the system, specific customer class or classes or an individual customer, indicating the frequency, duration and amount of demand placed on the water production and delivery system. Costs associated with providing facilities to meet demands placed on the system by customers. A schedule of rates applicable to blocks of increasing usage in which the usage in each succeeding block is charged at a lower unit rate than in the previous blocks. Generally, each successive block rate is applicable to a greater volume of water delivery than the preceding block(s). An obligation resulting from the borrowing of money or from the purchase of goods and services. That portion of the service line from the customer meter to the structure or premises, which is supplied. Costs directly associated with serving customers, irrespective of the amount of water use. Such costs generally include meter reading, billing, accounting and collection expense, along with maintenance and capital costs related to meters and associated services. The grouping of customers into classes bearing similar usage characteristics or types of service. Typically, water utility customers may be classified as residential, commercial and industrial for rate-making and other purposes. For specific utilities, there may be a breakdown of these general classes into more specific groups. For example, the industrial class may be subdivided into small industry, large industry and special. Some water systems have individual customers (large users) with unique water-use characteristics, service requirements, or other factors that set them apart from other general customer classes and thus may require a separate class designation. This may include large hospitals, universities, military establishments, wholesale service districts and other such categories. (1) A physical connection through which a supply of potable water could be contaminated or polluted. (2) A connection between a supervised potable water supply and an unsupervised supply of unknown potability. The operating and capital costs incurred in meeting various aspects of providing water service, such as customer billing costs, demand-related costs and variable costs.  The charge made by the utility to recover the cost of connecting the customer's service line to the utility's facilities. Any artificial or natural duct, either open or closed, for conveying liquids or other fluids. That portion of a service line between the distribution main and the curb stop. Costs that tend to vary with the quantity of water produced, including the costs of chemicals, a large part of power costs and other elements that follow, or change almost directly with, the amount of water produced. Purchased water costs, if the water is purchased on a unit volume basis without minimum charges or any associated demand charges, may also be considered as commodity costs. The application of chlorine to water or wastewater, generally for the purpose of disinfection, but frequently for accomplishing other biological or chemical results. A valve provided with a disk hinged on one edge so that it opens in the direction of normal flow and closes with reversal of flow. Expenditures that result in the acquisition of or addition of fixed assets. The ability of available water utility resources to meet the quantity, quality, peak loads and other service needs of the various customers or classes of customers served by the utility. An arrangement of pipes, conduits, gates and valves whereby the flow may be passed around a hydraulic structure or other equipment. A shallow depression or tank through which liquids may be passed or in which they are detained for treatment or storage. Costs that tend to vary with the total quantity of water used and operation under average load conditions. Costs included are operation and maintenance expenses of supply, treatment, pumping and transmission and distribution facilities, and capital costs related to plant investment associated with serving customers at a constant, or average, annual rate of use (100 percent load factor).