Water Pricing

Situated along the shore of Lake Michigan, metropolitan Chicago has benefited for centuries from an abundance of fresh water. The infrastructure necessary for delivering water and removing wastewater and stormwater is primarily underground and, subsequently, is often forgotten until a problem arises. However, recognition is growing that water infrastructure is aging and our community water suppliers face challenges. At the same time, a new regional understanding has emerged on the role of water pricing in the effective provision and management of our water resources and infrastructure.

People sitting around a fountain in Daley Plaza, Chicago

Local governments are the primary investors in water infrastructure. Revenues generated by water rates are the primary funding source for most community water systems. Setting water rates that recover the full cost of providing water service can contribute to financial resilience and create enough revenue to maintain the system. Sustainable rates enable communities to meet water demand reliably and safely. Recovering full costs is especially important because poor infrastructure poses one of the top three challenges for northeastern Illinois water utilities, and failing infrastructure can impose high costs on communities in terms of damage and inconvenience.

Full-cost pricing is fundamental to addressing both the need for investment in water infrastructure and the challenge of accommodating millions of additional residents expected to move to the region by mid-century. Illinois-Indiana Sea Grant, in partnership with the Chicago Metropolitan Agency for Planning, has developed the Full-Cost Water Pricing Guidebook that explores full-cost pricing as a tool for local decision makers interested in sustainably managing community water supply.

The free Northeast Illinois Water Rates Dashboard water rates tool provides utilities in the Chicago area with the ability to compare their residential water and wastewater rates against multiple characteristics, including utility finances, system size, customer demographics, and geography.


Cover of the Full-Cost Water Pricing Guidebook

Full-Cost Water Pricing Guidebook

IISG-12-46
Free

This manual explores full-cost pricing as a tool for local decision makers interested in sustainably managing community water supply.

Download the PDF


ISAWWA Cover

Understanding Conservation Pricing

IISG-17-012
Free

Every community has unique needs and must decide what it wants to achieve with water rates. This factsheet discusses rate design to encourage efficient water use, in other words, conservation pricing.

Download the PDF

Contact Info

Topic Specialist

Margaret Schneemann
Water Resource Economist
312-676-7456

Research Projects

Carolyn Foley
Research Coordinator
765-494-3601

Publications

Ethan Chitty
Administrative Assistant
765-496-6009

Education & Training

Terri Hallesy
Education Coordinator
217-244-8809