Assessing the performance of alternative water and sanitation tariffs: the case of Nairobi, Kenya

Policy makers and utility managers can use a variety of tariff structures to calculate customers’ bills for water and sanitation services, ranging from a simple flat monthly fee to complicated multipart tariffs with seasonal pricing based on metered water use. This paper examines the performance of alternative tariff structures for water and wastewater services in Nairobi, Kenya. In particular, evaluate the performance of alternative tariffs relative to several criteria: the overall quantity of water sold (i.e., conservation), the magnitude of the total subsidy delivered through the tariff, subsidy incidence, change in customer welfare, and change in social welfare. To accomplish this, develop a dynamic tariff simulation model and use a complete set of billing records from Nairobi City Water and Sewer Company to model the performance of alternative tariff structures.