(c) Public water suppliers serving more than 1,000 people must employ encourage
water conservation by employing water use demand reduction measures, including a
conservation rate structure, as defined in subdivision 4, paragraph (a), unless exempted
under subdivision 4, paragraph (c), before requesting approval from the commissioner
of health under section 144.383, paragraph (a), to construct a public water supply well
or requesting an increase in the authorized volume of appropriation. Demand reduction
measures must include evaluation of conservation rate structures and a public education
program that may include a toilet and showerhead retrofit program. The commissioner
of natural resources and the water supplier shall use a collaborative process to achieve
demand reduction measures as a part of a water supply plan review process.
(d) Public water suppliers serving more than 1,000 people must submit records
that indicate the number of connections and amount of use by customer category and
volume of water unaccounted for with the annual report of water use required under
section 103G.281, subdivision 3.
(e) For the purposes of this section, "public water supplier" means an entity
that owns, manages, or operates a public water supply, as defined in section 144.382,
subdivision 4 .

Sec. 3. Minnesota Statutes 2010, section 103G.291, subdivision 4, is amended to read:
Subd. 4. Conservation rate structure required Demand reduction measures.
(a) For the purposes of this section, "demand reduction measures" means measures that
reduce water demand, water losses, peak water demands, and nonessential water uses.
Demand reduction measures must include a conservation rate structure, or a uniform rate
structure with a conservation program that achieves demand reduction. A "conservation
rate structure" means a rate structure that encourages conservation and may include
increasing block rates, seasonal rates, time of use rates, individualized goal rates, or excess
use rates. If a conservation rate is applied to multifamily dwellings, the rate structure must
consider each residential unit as an individual user in multiple-family dwellings.
(b) To encourage conservation, a public water supplier serving more than 1,000
people in the metropolitan area, as defined in section 473.121, subdivision 2, shall use
a conservation rate structure by January 1, 2010. All remaining public water suppliers
serving more than 1,000 people shall use a conservation rate structure must implement
demand reduction measures by January 1, 2013 2015.
(c) A public water supplier without the proper measuring equipment to track the
amount of water used by its users, as of July 1, 2008, is exempt from this subdivision and
the conservation rate structure requirement under subdivision 3, paragraph (c).