In wastewater management big variations in flowrates, caused by precipitation, leads to high peak loads forcing treatment facilities to maintain large over capacity. Wastewater management is a capital-intensive industry, meaning that new investments are costly and should therefore be avoided. But as peak load levels increase and stricter regulations are imposed it becomes increasingly hard to maintain sufficient reduction rates and facilities are likely to face new investments if the highest flowrates can’t be reduced. One way to reduce flowrates is to charge higher prices for the peak loads through an efficient tariff design. This thesis includes a literature review to define what constitutes an efficient tariff and then moves on to develop a model including marginal cost pricing and increasing block tariff design that examine how the marginal cost price is affected by constructing the tariff in different ways. The results show that the marginal price can be significantly increased by adapting this approach compared to a two part tariff with one fixed and one variable part which is commonly used by wastewater utilities today. The biggest deciding factor will be how the marginal block is defined.

The availability and management of water resources is a global issue, this is particularly true in countries with limited water resources, such as Palestine, which falls under the Water Stress Line (1000 m3/person/year)1. Palestine has operated under an -unstable political, economic and social conditions for more than six decades. This uncertainty has resulted in mismanagement, inefficient institutions and the over-xploitation of water resources. The main aim of this study was to produce socioeconomic indicators based on the water tariff structure in order to be pro-poor and to enable water utilities to cope with uncertainties. The study s recommendation is for a flexible, pro-poor and socially acceptable tariff structure have been based on empirical work and socio-economic data which has been collected by rigorous research and reinforced with case studies. Initial results based on a pilot survey showed that there was a 33% increase in the revenue of the water supplier equivalent to 13% of the total water costs and an increase in the number of beneficiaries that paid their bills ranging from 10.5% to 38.6%. If applied at national level, the model application based on current socioeconomic data would have a wide positive socio-economic impact in reducing poverty, financial equality, social security and reduction of the effect of uncertainties. The reform of the existing legal and institution framework are a prerequisite for the application of this kind of model. Institutional and legal reforms coupled with the application of this model, would produce a dynamic water pricing policy as part of the efforts to have an integrated water management and would serve as a tool for the national goal of poverty alleviation and food security.