The "take or pay" term used to describe the water supply contract means that the cities pay the fixed costs component of the wholesale water rate based on the highest year of consumption, even if in subsequent years they don’t reach that same level of water use. This ensures the fixed system costs are covered regardless of the amount of water used. The cities and their customers receive an annual rebate for the variable costs, such as chemicals and power not used for treatment and delivery, based on each city’s actual consumption for that year.
Cities don’t pay for "unused" water - they pay an allocation of the regional water infrastructure and system costs based upon the maximum amount of potential capacity each city needs. The cities and their customers are paying for water service, not just the water molecules that are delivered. Learn more about how the North Texas Municipal Water District sets their rates.