Mayor Charles Meeker says Raleigh residents who use the most water should pay gradually more for it, a change he hopes would cut water waste in the drought-prone capital city.

Meeker said he has no specific rates in mind, and the City Council hasn't begun considering the concept he floated Thursday in announcing his new agenda.

But it's far from a unique idea. According to UNC-Chapel Hill's School of Government, rate structures are used to encourage conservation in about one in five water systems in the state -- including two in the Triangle.

Water-rich Cary has relied on tiered water rates since 1999. Its leaders credit the rates with reducing the fast-growing town's water consumption per person.

Greensboro and other cities have also seen consumption drop since they switched to tiered rates.

And the Orange Water and Sewer Authority enacted varying rates Oct. 1, also to encourage water conservation.

"The board wanted to send a stronger pricing signal to customers to conserve water," said Ed Kerwin, executive director of the Orange County utility. "Even before this drought, we wanted to be sure we're using wisely a limited resource. We have found that pricing is an effective tool."

That's Meeker's intention, too. With the help of a supportive new City Council and with Raleigh facing its fourth -- and worst -- drought in eight years, the mayor's timing may be right.

With Raleigh's steady growth and recurring droughts straining the city's water supply at Falls Lake, moving to tiered rates is necessary, Meeker said Friday.

"It just makes sense to keep the lake fuller when we don't know when the next drought's going to hit," he said.

The varied rate structure probably would apply only to residential customers, Meeker said, which is typical elsewhere.

The trick everywhere that tiered rates go into effect is to set them so that they're high enough to compensate for the lower volume of water sold, but not so high that the utility loses revenue. Because many cities finance utility improvements with revenue bonds, they're legally obligated to maintain certain water and sewer revenue levels.

Cary and OWASA both calibrated their tiered rates to break roughly even financially in the exchange, and they say they succeeded.

Raleigh's utility staff will have to figure out a way to do the same balancing, Meeker said.

That examination hasn't begun yet, said Ed Buchan, Raleigh's water conservation specialist.

"In theory, it can be beneficial," he said. "A tiered rate structure can add some complexity, because you just don't know how it's going to work out."

Raleigh officials don't yet know how switching to tiered rates in the city would affect residents of the other Wake County towns to which Raleigh provides water, he said.

Cary's policy

Raleigh's flat, relatively cheap residential water rate is about $2.13 per 1,000 gallons a month.

By contrast, Cary's four residential water rates rise from $3.28 per thousand gallons a month for the first 5,000 gallons to $5.33 per thousand gallons a month for a consumption range intended to cover a typical home's irrigation needs. It also has a penalty rate more than double that for extremely high users.

"The tough thing about utility rate policy is that not everybody agrees with it," said Karen Mills, Cary's finance director. "You have competing interests and priorities, and you have to try to balance that as well as you can."

But Cary's leaders endorsed tiered rates in the late 1990s, when the town's water-treatment capacity was tight. It has kept them in place since then, which has bolstered the town's other water-conservation policies.

"Our town managers and councils have been supportive," Mike Bajorek, Cary's interim director of public works and utilities, said recently. "Water is the lifeblood of a community, and it is finite."

With the luxury of a fairly large lake to draw water from, Raleigh leaders for decades have emphasized keeping prices low.

But Falls Lake, which is near the upper end of the Neuse River's watershed, has turned out to be more drought-sensitive than some other Triangle lakes -- including nearby Jordan Lake, which serves Cary, Apex, Morrisville, and other Triangle towns.

During the scorching summer, Raleigh's water demand reached an all-time high of 75 million gallons on Aug. 15, pushing the limit of the city's treatment plant off Falls of Neuse Road.

Public uncertainty

The comforting concept of an endless water supply has evaporated this year with half of Falls Lake. Even so, public opinion on tiered rates appears divided.

Raleigh resident Elliott Fisher, 62, said he's in favor of customers' paying high rates the more water they use. "Something is going to have to be done to bring it seriously to people's attention," Fisher said. "Usually that means getting them in the pocketbook."

And Cary resident Winston Hooker Sr., 73, said he's a fan of the tiered-rate structure, although he hadn't noticed it because his homeowner association pays his water bills.

"It doesn't really affect me, but it's a good idea in principle," Hooker said. "It's kind of like income tax: The more you got, the more you pay."

Others aren't so sure.

Construction contractor Chuck Clark, 40, who recently moved to Cary from Buffalo, N.Y., said the tiered rates have pushed his monthly water bills far above what they were up North.

"I can tell you, it's too much money. I'm very upset about it," he said. "I was going to call to ask about it."

Cary's Audra Cox, 30, catering manager at Cindy's House Cafe, said she didn't know her town charges tiered rates. "It makes me want to look into what everyone else is paying," she said.

In Raleigh, it seems, Mayor Meeker has much the same idea.

(Staff writer Peggy Lim contributed to this report.)