Privatization is Privatization is Privatization

Yesterday, the largest private water corporation in the United States, American Water, announced it has received the green light from state regulators to spin off from its parent company, Germany-based utility giant RWE. RWE will sell American Water through an initial public offering on Wall Street, likely to come later this year.

Under RWE’s ownership, American customers suffered exorbitant rate increases, poor customer services, and in some cases inoperable fire hydrants threatening public safety. In fact, according RWE’s board meeting minutes, tremendous political resistance to privatization was a significant reason for RWE’s global exit from the water business.

Earlier this year, RWE unloaded its British water unit, Thames Water. On July 17, the city council of Stockton, CA voted unanimously to put an end to Thames Water’s 20-year, $600 million privatization contract, which a judge ruled had violated California environmental laws. The timely sale of the asset means that this notorious privatization failure, which was featured in an In These Times article this week, will be affecting the bottom line of the Thames buyers, not RWE or American Water. But what’s on the horizon for American consumers or American Water investors?

Transferring ownership from Germany to New Jersey doesn’t mean change is on the way. The company’s priorities remain the same , to deliver a profit to shareholders , and often come at the expense of customers. Communities like Felton, CA will continue to pursue local control of their community’s water and seek to join the 86% of Americans who get our water from a public utility.