Tiered water rates is when a water company charges a customer more when they use a lot of water. In Arizona, 76% of water companies use tiered water rate structure. Only 13% of the nation uses tired water rates.
The water companies use tiered water rates pricing to help customers conserve water. If a customer uses a lot of water to water their garden or fruit trees, the water company penalizes them for using too much water. The water companies do not want to have customers use water.