In advance of a Congressional hearing, 146 environmental, labor, religious, social justice and community-based organizations sent a letter opposing a proposal to open up federal wastewater funding to large investor-owned organizations – a dramatic move that would break with decades of tradition and steer much-needed public funding to private entities.

The Clean Water SRF Parity Act (HR 250), introduced by Rep. John Garamendi (CA-08), would allow large investor-owned wastewater utilities to access the Clean Water State Revolving Fund, including the $12.7 billion in funding to the program from the Bipartisan Infrastructure Law and funding from any future increases. The Clean Water State Revolving Fund is the main source of federal support for public wastewater and stormwater systems across the country. Since its establishment under the Reagan administration in the 1980s, the low-interest loans and subsidies have been restricted to publicly owned treatment works. This longstanding tradition of limiting federal wastewater support to publicly owned systems dates to the construction grants program of 1956. 

Corporate access to federal funds is scheduled to be discussed as part of a hearing on wastewater financing held by the Subcommittee on Water Resources and Environment in the House Transportation and Infrastructure Committee.

“We can’t let the corporate water lobby take federal clean water funding away from our municipal sewer systems,” said Mary Grant, the Public Water for All Campaign Director at Food & Water Watch. “The Clean Water SRF Parity Act would merely serve to grease the wheels on sewer privatization to pad the pockets of large corporations. It would disparately harm disadvantaged communities who are already struggling to access the Clean Water State Revolving Funds. Congress must reject the Clean Water SRF Parity Act. Instead, Congress must provide reliable funding to our publicly owned wastewater providers to help keep services safe, reliable and affordable service and protect the environment.” 

The letter warns that the legislation would effectively cut into the pool of available funding for  local governments by transferring to for-profit sewer corporations. The needs of publicly owned wastewater systems are substantial and growing every year because of aging infrastructure, increasingly severe wet weather events and rising sea levels that overwhelm systems, and stronger water quality regulations that are necessary to protect public and environmental health. 

“In central Texas we see the ways in which water privatization has harmed communities of color who are now forced to pay high prices for low quality water,” said Alexia Leclercq, the Policy Director of PODER. “The CWSRF is extremely dangerous because it would turn federal funding away from our municipal sewer systems and pave the path for further water privatization.” 

Currently, investor-owned sewer utilities provide only 2 percent of municipal wastewater treatment nationally. Several states, including Wisconsin, have no investor-owned sewer utilities at all, and a number of states do not regulate any investor-owned sewer utilities including Georgia, Idaho, Michigan, Minnesota, New York, North Dakota, Oklahoma, South Dakota, and Wyoming. Large investor-owned sewer utilities are concentrated in a small handful of states, but sewer privatization has been on the rise in states like Pennsylvania, where state legislation has unleashed a wave of transactions. 

“Pennsylvania has been the petri dish for this sewer privatization experiment and the results are in: Privatized sewer service is vastly more expensive to municipal operations at no discernable increase in service,” said Kofi Osei, cofounder of Neighbors Opposing Privatization Efforts (NOPE). “American Water charges double to triple the rates of municipal sewer systems and has nearly doubled their own rates since Pennsylvania started encouraging privatization with the passage of 2016’s Act 12. More than costs, utility companies often use underhanded techniques to get local governments to sell their utilities at direct opposition with the will of the residents. The federal government has no business subsidizing this harmful utility model.” 

Affected residents in Pennsylvania communities like New Garden Township and Exeter have seen their sewer bills increase substantially after privatization. 

“CWSRF was created to help communities rebuild and maintain critical infrastructure, while investing money in local economies and creating locally based jobs,” said Peter Mrozinsi of Keep Water Affordable in New Garden Township, Pa. “We oppose passage of the Clean Water SFF Parity Act that will allow for-profit utilities, which already have access to private capital, to draw these funds away from communities, defeating the purpose of the CWSRF.”

The letter was signed by American Federation of State, County, and Municipal Employees (AFSCME), the nation’s largest public service employees union; Center for Biological Diversity; Corporate Accountability; Food & Water Watch; For Love of Water (FLOW); Freshwater Future; In the Public Interest; Institute for Agriculture and Trade Policy; Kairos Center for Religions, Rights and Social Justice; Mothers Out Front – National; Neighbors Opposing Privatization Efforts (NOPE); PODER; Taproot Earth; The Story of Stuff Project; The Water Collaborative of Greater New Orleans; Waterkeeper Alliance;  We the People of Detroit; and more than 100 other organizations.