Shanghai residents have to shell out more on water from tomorrow as the city sharply increases water fees.

The city adopts a new progressive tariff system, similar to the one used by power utilities and designed to encourage conservation. For the first 220 cubic meters used in a year, residents will pay 3.45 yuan per cubic meter. The volume covers about 85 percent of the city's households, according to the Shanghai Development and Reform Commission.

Currently, Shanghai residents are paying 2.8 yuan per cubic meter in a single-price system.

The initial tariffs plan proposed 3.5 yuan per cubic meter for the first 240 cubic meters used. But at a public hearing last month, some of the participants said that the basic volume was not enough, while others suggested that the government should lower the proposed water tariff for the basic volume.

In the end a compromise was worked out.

A basic volume of 240 cubic meters could cover 90 percent of the residents.

In the new tariffs, the price will rise to 4.83 yuan for consumption beyond 220 cubic meters, and to 5.83 yuan for more than 300 cubic meters, both rates higher than initially proposed. Households with five or more people will also get an extra quota of 100 cubic meters in their basic annual volume.

"The revisions reflect our idea of encouraging conservation by charging even more for excess use," said Wang Huajie, deputy chief engineer at the Shanghai Water Authority.

Authorities yesterday were unable to give a precise figure for the average increase under the new progressive pricing plan, but they said it will not be much different from the initial version, which was translating into an increase of 0.85 yuan per cubic meter on average, or around 30 percent.

This is the first time Shanghai has raised the water tariffs since November 2010. The city tries to ease the losses for water utilities as they continue to invest in improving supplies and quality.

Officials have had concerns about a progressive system as some of the households are still using shared meters. These residents won't be included in the new system, but they will pay 3.45 yuan per cubic meter regardless of the usage before separate meters are installed for them.