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Although most freshwater resources are used in agriculture, residential water use is a much more energy intensive user. Based on this, we analyze the increased willingness to adopt water conservation strategies if energy cost is included in the customers' utility function. Using a Water‐Energy‐CO₂ emissions model for household water end uses and probability distribution functions for parameters affecting water and water‐related energy use in 10 different locations in California, this research introduces a probabilistic two‐stage optimization model considering technical and behavioral decision variables to obtain the most economical strategies to minimize household water and water‐related energy bills and costs given both water and energy price shocks. Results can provide an upper bound of household savings for customers with well‐behaved preferences, and show greater adoption rates to reduce energy …