Water Activists Slay Corporate Behemoth:

Food & Water Watch Applauds Felton, CA’s Victory to Control Water Resources

Washington, DC. After six years of political and legal battles, the town of Felton, California has prevailed in efforts to acquire its water system from California-American Water, which was until recently, a subsidiary of the German multi-national corporation RWE. The San Lorenzo Valley Water District will purchase the water system, which includes 250 acres of forested watershed land, for $10.5 million and take control of the $2.9 million loan residents have been paying for a new water treatment plant.

The endeavor to win control of Felton’s water was lead by the grassroots organization Felton Friends of Locally Owned Water (FLOW).  Its victory is one in a series of setbacks for corporate water interests. In 2005, FLOW convinced the community to pass an $11 million bond to buy the water system after California-American attempted to hike rates by 74 percent. RWE/Cal-Am rejected the offer and shortly thereafter attempted to raise rates by over 100 percent. In late 2005, RWE announced it would instead sell its stake in American Water citing poor financial returns, community opposition to privatization and American Water’s mismanagement of its infrastructure.

In 2008 RWE’s Initial Public Offering of American Water went poorly as it planned to sell shares for $24-$26, but at the last minute dropped the offering price to $22-$23. Yet opening day shares sold at $21.50 and the company only managed to unload 36% of them. Last week’s purchase agreement came just days before a Santa Cruz jury was expected to announce the value of the water system as part of FLOW’s eminent domain suit to take wrestle it from California-American’s control.

“Felton FLOW's landmark victory over private water interests demonstrates that grassroots action can stop corporate interests from profiteering on water,” said Wenonah Hauter, Executive Director of Food & Water Watch. “This win, combined with the failure of RWE to efficiently and affordably deliver water to the residents of Felton is yet another example of why water utilities should be managed by the public. Felton’s victory should inspire other communities suffering from the effects of privatization to take back their water systems.”

Food & Water Watch is a nonprofit consumer rights organization that challenges the corporate control and abuse of our food and water resources. Visit www.foodandwaterwatch.org