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How can I determine what my water pressure should be set at?

Greetings!
I'm trying to figure out if I have a water pressure problem. I bought a meter and determined that my water pressure with all outlets closed is just shy of 100psi. As soon as I turn on a sink, the water pressure drops to about 40psi. Is a drop this much normal?

What are the recommended settings for a pressure reducing valve? Should I be alarmed of a large difference in pressure when the water is turned on?
Adam, March 2008
100 psi is about 7 bar (i.e. equivalent to a column of water 70 metres or approx 210 ft high). This is a very high pressure for supply coming into a house. Pressures above 3 bar (30 m) can damage fittings or at least cause greater wear on taps etc.
If you have a PRV, the downstream pressure should be set no higher than 2.5 to 3 bar.
Of course the pressure drops when you open a tap. Energy stored as pressure behind the closed tap is converted into kinetic energy of the moving water as the flow starts.

J, March 2008