Why the DuPage Water Commission wants to spend billions for own pipeline from Lake Michigan

DuPage Water Commission officials believe they can save money and provide cheaper water to customers if they build their own pipeline from Lake Michigan and circumvent Chicago, the agency's current supplier.

Already frustrated by a lack of contract extension talks from Chicago officials and a price tag they complain is inflated, water commission leaders recently ordered a $300,000 study of what it would take to build their own pipeline from Lake Michigan.

"The question becomes can we build a new system and have it cost less than $120 million a year," said Paul May, water commission executive director. "As concluded by that report, the answer is yes."

The report, commissioned from Arizona-based engineering and design firm Carollo, gave the commission three options where it could build an intake crib on the lake and then proceed to a treatment plant and through a labyrinth of pipes to the water commission's pumping station in Elmhurst.

It is not without concerns, though.

The price tag is anticipated at roughly $5.3 billion to $7 billion, depending on the route they take, interest rates for a 30-year loan and construction costs.

The redacted report from Carollo also assumes "legal and political challenges" ahead of the construction process.

If built, it would take 12 to 15 years to get up and running, officials said.

May and commission board Chairman Jim Zay both believe land acquisition issues are fairly easy to overcome because of easement rights along train tracks.

"If you would have told me years ago that we'd need to build our own pipeline, I'd have said no," Zay said. "But we don't have any alternatives at this point."

The commission's current 40-year contract ends in March 2024. They have to inform Chicago by September what their plans are for extending the contract.

To hear water commission officials tell it, their pleas for a sit-down with colleagues from the Chicago Department of Water Management have largely gone unheeded for a long time.

"We've been trying to negotiate with them for four years," Zay said. "The devil's in the details, and every time we tried to get something in writing, we couldn't."

Chicago water management officials said securing a new contract with the DuPage Water Commission was a "priority" and they "intend to work expeditiously" to negotiate one.

The DuPage Water Commission is Chicago's oldest and biggest water client, representing roughly 30% of the revenue received annually from suburban contracts. Currently, Chicago charges the water commission $4.54 per 1,000 gallons, costing a total of $113 million in 2022.

But Zay contends DuPage customers have been overcharged for years and will continue to be overcharged by Chicago until a new cost-of-service model is introduced in 2030 that is expected to drop the cost to $2.50 to $3 per 1,000 gallons.

"Why not start now if you know that's the standard?" Zay said.

The implementation of the new cost model is tied to a deal with Chicago recently inked with Joliet to be that suburb's water supplier.

"We had to look at alternate sources if we think Joliet is getting a better deal," Zay said.

The rates for all of Chicago's water customers are still being determined with the new model, city officials said.

"The city is still in the process of developing the methodology for the cost-of-service rate where each customer will pay a rate based on the unique infrastructure and costs required to serve them," water management spokeswoman Megan Vidis said. "As such, the city cannot exactly predict what rate any individual wholesale customer will pay."

May, however, said the DuPage Water Commission has "no incentive to stay and all the incentive to do something else."

The DuPage Water Commission serves 35 buyers including Naperville, Elmhurst and Wheaton. The water rates charged in each community vary depending on infrastructure and borrowing costs.

The water commission's next board meeting is slated for June 15.

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