California Code, Water Code - WAT § 371

(a) “Allocation-based conservation water pricing” means a retail water rate structure that meets all of the criteria in Section 372.

(b) “Basic charge” means a volumetric unit charge for the cost of water service other than any fixed costs that are recovered through meter charges or other fixed charges other than incremental costs that are recovered through conservation charges.  A basic charge may include the cost of generally applicable conservation measures assumed in establishing basic use allocations.

(c) “Conservation charge” means a volumetric unit charge for incremental costs.

(d) “Incremental costs” means the costs of water service, including capital costs, that the public entity incurs directly, or by contract, as a result of the use of water in excess of the basic use allocation or to implement water conservation or demand management measures employed to increase efficient uses of water, and further discourage the wasteful or unreasonable use of water, and may include any of the following:

(e) “Public entity” means a city, whether general law or chartered, county, city and county, special district, agency, authority, any other municipal public corporation or district, or any other political subdivision of the state that provides retail water service and that is an urban water supplier, as defined in Section 10617.