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Research Project

Networked Supply Chains: Describing the Costs Of Lake Michigan’s Drinking Water, by Jason Michnick, Kate Albrecht, Deborah A. Carroll, Amanda Kass, and Brooke Wetmore

Research Area(s)
Energy and Water Policy
Government Finance Research

Abstract

Most utilities supplying Lake Michigan water to Illinois residents rely on intergovernmental wholesale purchasing agreements. In this article, we describe this complex network of interconnected municipalities in northeastern Illinois—the Lake Michigan Drinking Water Network—and examine variation in residential water bills. We find a high degree of fragmentation is associated with substantial differences in what residents pay for their drinking water. Neither the type of purchasing agreement nor position within a supply chain explain such differences; however, there is less variation in residential water bills among municipalities with collective purchasing agreements. In addition, municipalities that self-produce their drinking water have the lowest rates.   Published: Forthcoming. View the paper here.