After RWE bought American Water, whose Kentucky arm owns Lexington’s water system, in January 2002, residents began organizing for public control of their water. (RWE spun off American Water in 2008.)
Dissatisfied with company’s performance and with private ownership more generally, Bluegrass FLOW and LUV (Let Us Vote) Lexington spearheaded a local control effort with the support of other local groups including Kentuckians for the Commonwealth and the Sierra Club.
This movement, led by former Kentucky Governor Ned Breathitt, Jr. (who passed away on October 13, 2003) and other prominent Lexingtonians, organized phone banks, neighborhood walks and rallies to build support for local ownership. Kentucky American Water responded by spending big to battle the community’s efforts every step of the way.
In 2003, Bluegrass FLOW persuaded the Lexington-Fayette Urban County Council to begin the process of bringing the water system under local, public control. Soon after the proceedings began, however, the water company helped elect new council members who were sympathetic to the company and who ended the move towards local ownership.
The community was not easily silenced. In the summer of 2005, LUV volunteers collected over 26,000 signatures to get the issue of a public purchase on the November ballot. The water company sued and stopped the vote. Absentee ballots already received by the time the vote was cancelled went 77-22 in favor of local ownership. No wonder the water company wanted to cancel the election!
The water company eventually dropped its legal challenge and allowed the issue to go on the ballot in November 2006. After pouring at least $2.71 million into its campaign against local control, the water company defeated the ballot measure. Local analysis of the vote conceded that the company’s well-financed campaign was able to steer the discussion away from local ownership to stoke popular sentiment against the use of eminent domain and defeat the referendum.
“The extraordinary amount of money that Kentucky American had to throw into it helped frame the issue as ‘Are you for or against condemnation … and eminent domain?’ ” Alan Stein, president of the minor league baseball team the Lexington Legends and husband of state Rep. Kathy Stein (who supported Bluegrass FLOW), told the Lexington Herald-Leader after the vote.
Although getting the measure on the ballot was a victory in itself, the struggle in Lexington serves as a stark lesson for any community considering the sale of its water system: Privatization can be very difficult to undo. More often than not, large water companies will fight tooth-and-nail to hold onto the revenue stream from water bills.
- This Is What Democracy Looks Like (blog)
- Election Day Sleeper: Lexington Water Vote (press release)
- Election Results and Local Water (press release)
- The Future of American Water: The Story of RWE and the Politics of Privatization (report)
- Faulty Pipes: Why Public Funding — Not Privatization — Is the Answer for U.S. Water Systems (report)
- Municipalization Guide: How U.S. Communities Can Secure Local Public Control of Privately Owned Water and Sewer Systems (report)