What Is a Sewer Credit and How Does It Work?

If your commercial building has cooling towers, boilers, or significant irrigation, you’re almost certainly paying sewer charges on water that never reaches the sewer system. A sewer credit fixes that — and the savings can be substantial.

The Simple Explanation

A sewer credit is an adjustment to your utility bill that reduces sewer charges based on documented water that doesn’t flow to the sewer. Most municipalities calculate your sewer bill by assuming that every gallon of water you purchase eventually goes down the drain. For a residential home, that’s roughly accurate. For a commercial building with a cooling tower evaporating thousands of gallons per month into the atmosphere, it’s wildly wrong.

Sewer credits correct this assumption by letting you prove — with metering data — how much water leaves your building through evaporation, irrigation absorption, or other non-sewer paths. Your sewer charges are then calculated only on the water that actually reaches the sewer system.

How the Billing Assumption Creates Overpayments

Here’s a simplified example. A mid-size office building purchases 500,000 gallons of water per month. The city charges $8.50 per thousand gallons for sewer service, so the monthly sewer bill is $4,250. But the building’s cooling tower evaporates 150,000 gallons per month — water that goes into the atmosphere, not the sewer. Without a sewer credit, the building pays sewer charges on all 500,000 gallons. With a sewer credit, sewer charges apply to only 350,000 gallons, dropping the bill to $2,975. That’s $1,275 per month in savings — over $15,000 per year.

According to the U.S. Environmental Protection Agency, water and sewer rates have been rising faster than inflation across the country, making these savings increasingly significant over time.

What Qualifies for a Sewer Credit?

The most common qualifying water uses in commercial buildings include cooling tower evaporation (typically the largest single source), boiler steam losses, landscape irrigation that soaks into the ground, and process water consumed in manufacturing. The key requirement is that you can document the volume with a submeter or other approved measurement method.

The U.S. Department of Energy’s Best Management Practice 10 provides guidelines for cooling tower water management that align closely with what most utilities require for credit applications.

The Basic Process

Applying for sewer credits generally follows five steps. First, confirm your local utility offers a sewer credit or evaporation credit program — most large municipalities do. Second, install submeters on your non-sewer water uses, typically on the cooling tower makeup line and blowdown line. Third, collect baseline data for 60 to 90 days to document your water use patterns. Fourth, submit the application with your metering data and supporting documentation. Fifth, receive adjusted billing going forward.

The timeline from first meter installation to first adjusted bill is typically three to six months, depending on your utility’s processing speed. Once approved, the credits continue as long as you maintain your meters and submit periodic renewal data.

If you’d like to understand the full scope of evaporation credits in more detail, our complete guide to evaporation credits covers every nuance. For a deeper look at how billing assumptions create these overpayments, see our article on utility billing assumptions vs. reality.

The Bottom Line

Sewer credits aren’t a loophole or a special deal — they’re a correction to a billing assumption that doesn’t reflect how commercial buildings actually use water. If your building evaporates, irrigates, or otherwise consumes water that never reaches the sewer, you deserve to pay sewer charges only on the water that does. The process is straightforward, the savings are real, and the only question is how long you want to keep overpaying before you apply.