An exercise in utility: Don't tell the Mayor about my water bill

Over the past two years, our family has taken some steps to reduce the impact that utility bills have on our bottom line.  This partly came out of necessity, and partly to lay the groundwork for future finances.  In this installment, I look at the impact of our water bill on our family economy.

Talk to someone about water conservation in the city of Chicago, and the eyes glaze over, they look to the east, and get a look of, "What are you talking about?" on their face. We live next to the largest source of naturally-occuring fresh water on the planet, so thoughts of water conservation make little sense.

For years, the way that the City of Chicago billed citizens for water use reflected that relationship.  The City could have cared less how much water a building used, the property owner paid based upon the frontage (distance along the property parallel to the street).  Every year, the departments that manage the water and sewer pipes would put together their annual budgets, and that would get divided evenly over the length of street-front across the city.  This meant that two neighbors who used vastly different amounts of water would have the same annual bill for water and sewer.  We know that pricing a commodity in that way does not promote efficient use of the resource, but rather, it promotes waste.

We should care about the waste, not just because of the availability, but also the impact of what happens after we use the water.  Although we will not dry up Lake Michigan anytime soon, low lake levels influence the effectiveness of water withdrawals, and create issues with balance between the lake and surrounding bodies of water - namely the Chicago River and the I&M Shipping Canal.  In addition, the Chicago area sewer system does not process water for return to the Lake, but rather, toward the Mississippi River.  This means that we draw water from the Lake, and send it away, then when rain falls on the city, most of it gets swept away from the Lake Michigan - where it should recharge the source - and instead ends up in the Mississippi Delta.  This contributes to flooding along all the tributaries leading to, and including, the Mississippi, and damages the ecosystems of the Delta by introducing more freshwater than desired.

With all these impacts, we should focus on using water more wisely, and over the past decade, the City has moved to installing water meters on all properties and charging the owners not just for the infrastructure necessary to deliver water and transport sewage, but based on the total water consumed.  Whereas the old bill had two flat fees for water and sewer, the new bill has a per-gallon charge for each of water and sewer.  It is interesting to see the impact of this switch in fee structure.

In our home, we have 3.5 "full-time equivalent" occupants.  My wife, youngest child, and I live in the house full-time, and we have one college-aged child living mostly away from home, then two high-school aged children who live with us part of the time.  Over the course of a year, we consume approximately 12,000 gallons of water, which, when divided over the people who live in the house over the course of the year, equates to about 10 gallons of water per person per day of direct, at-home water use.  This puts us well below average, and so any pricing system should recognize that and charge use accordingly.

Please don't tell the Mayor, but it totally does.

Prior to metering, we paid approximately $900 per year in water/sewer bills, or about 7.5 cents per gallon of water.  Not bad, considering that bottled water costs about $5.00 per gallon.  Under the current model, however, we pay a whopping....$0.0028 per gallon, or about $70 per year.

The City made a smart consumer move and promised users that their bills would be capped at previous levels (with allowable rate increases), but it would seem that someday soon that will have to go away.  For every home like ours that uses one-tenth the water, another customer must be using more.  Right now, there is no guarantee that customer will pay enough to make up the difference.  It will be interesting to see how this plays out moving forward.