Fact Sheets: Water Privatization

United Water — owned by Paris-based Suez Environnement (Suez) — wants to build a desalination plant on the Hudson River to serve Rockland County, New York. The company says that the treatment plant is not only “necessary” but also the “most cost-effective” and “sustainable” way to meet the area’s long-term water needs. Suez’s performance history, however, calls these claims into question.

Universal access to safe and affordable water and sanitation service is crucial for public health, but achieving it will require significant investments in infrastructure and expertise. Worldwide, an estimated 884 million people lack access to safe water, and 2.6 billion people lack access to improved sanitation. In the United States, water and sewer systems have a $55 billion annual funding shortfall. Public-public partnerships (PUPs) are an innovative model uniquely suited to help address these needs.

Aqua Utilities Florida,a a subsidiary of Pennsylvania-based Aqua America, is the largest private water utility in Florida, serving drinking water to about 60,000 people statewide. Many customers are deeply dissatisfied with the company and report chronic water quality and customer service problems, yet these customers pay some of the highest water rates in the state. State legislators need to take action to stop this consumer rip-off. No Floridian should have to pay excessive prices for poor service from Aqua Utilities or any other water company.

Residents across southeast Michigan must protect their water supply and fend off the looming threat of privatization. State lawmakers and officials have the ability to take away local decision-making powers and make it easier for private interests to control one of the largest water utilities in the country. The Detroit Water and Sewerage Department, water supplier for two in five people and sewage treatment provider for one in three people in the state, undoubtedly faces an uphill battle against dwindling sales and escalating needs, but privatization is not a viable option. It fails to address the system’s underlying problems and likely would only worsen Detroit’s water woes.

Investor owned water utility companies are pushing unreasonable rate schemes on consumers across the country. These schemes involve special surcharges that automatically increase water bills without a full public review, so that private utility companies can more quickly make a return on certain water distribution projects and ensure their long-term profitability. The companies are essentially trying to boost their earnings and shed regulatory oversight that protects consumers.

For-profit water companies usually hike household water prices after buying municipal water and sewer systems. Many companies employ an aggressive rate increase strategy to recoup their investment and boost profits, usually aiming for a new hike every other year. Over time, this can add hundreds of dollars to a consumer’s annual water bill.

The Coquina Coast Ocean Desalination Project is one water supply alternative being aggressively promoted by the St. Johns River Water Management District as a way to complement traditional groundwater sources in Flagler, Volusia, St. Johns, Marion and Lake County, Florida.

Franklin, New Jersey should retain public control of its valuable water services. Its well-run public water division provides high-quality service to about 50,000 people across the township. Despite the division’s good performance, the township is planning to privatize it and transfer control of the system’s operation, mainte- nance and management to United Water for 20 years.1 Privatization would jeop- ardize the township’s water service and undermine the interests of its residents.

Local governments across the country have uncovered a smart way to reduce costs and improve the performance of their water systems: They are exiting management contracts with private water companies and bringing water services under public control. A number of cities and towns have saved millions of dollars by running their water utilities with public employees instead of private contractors. For these communities, public operation is a much better deal.

St. Louis should retain public control of its valuable water resources. The city’s well-run water division provides quality drinking water to about 370,000 people and has never violated a water quality regulation in more than a century of testing. The city should not risk jeopardizing the commendable operation by transferring control to a private company like Veolia.