Water supply
Valuing Regional Water Supply Planning and Conservation Alternatives
Water Rates and Rate Structures in Northeast Illinois
IISG (along with University of Illinois Extension and the Chicago Metropolitan Agency for Planning) is engaged in a study that summarizes and evaluates current residential rate structures of water suppliers in the northeast Illinois region. A survey of water and wastewater rates of almost 900 water systems with service populations over 1,000 has been undertaken. Rate information is being collected from a utility survey (CMAP, 2008), websites, local ordinances, and telephone contacts. Residential water and sewer rates have been standardized and summarized to determine the potential for conservation pricing to be used as a regional demand-management strategy in meeting future water needs. Conservation pricing provides incentives to consumers to reduce water use, and certain rate structures carry more of a conservation message than others. This study examines utilities in terms of their conservation pricing message including type of rate structure, methods of price differentiation, distribution of commodity rate structures, and minimum base charge water provision. Baseline representative monthly-equivalent residential billings have been calculated and examined in relation to expected billings occurring under household conservation from non-price conservation strategies recommended in the Northeast Illinois water Supply plan. Policy recommendations are provided, and the role of other rate-setting objectives is considered. For more information, contact Margaret Schneemann.
