New Rate Survey of 500 U.S. Water Systems Finds Private Water Providers Charge 58% More

Washington, D.C.—In the largest U.S. water rate survey of its kind, Food & Water Watch today released a comprehensive review of the 500 largest U.S. community water systems that found that large, for-profit privately owned systems charge 58 percent more than large publicly owned systems. An overwhelming majority of U.S. water customers—87 percent—receive their water from a publicly owned, not-for-profit service provider.

The survey also shows that water systems are publicly owned and operated in the 10 most affordable cities for water of the 500 systems surveyed. As of January 2015, Phoenix, Ariz. enjoyed the most affordable household water use, while Flint, Michigan was the most expensive—an anomaly given the problems that the city has faced under emergency management. In 2014, an emergency manager switched the Flint water supply from Detroit to the Flint River in a proposed cost-cutting effort—corroding pipes that have caused lead poisoning and a deadly legionella outbreak.

“From emergency management in Michigan to failed privatization experiments across the country, corporate influence has failed U.S. water systems,” said Food & Water Watch Executive Director Wenonah Hauter. “Many of our community water systems are over 100 years old, and in desperate need of repair. Rather than running water systems like businesses, or worse, handing them over to corporations, we need increased federal investment in municipal water. With this federal funding, we can help avoid future infrastructure-related catastrophes.”

Other findings of the report include:

• From 2007 to 2014, the portion of people with water service from a publicly controlled entity increased from 83 percent to 87 percent.
• Between 2007 and 2014, the number of private systems dropped seven percent, while the number of people served by privately owned systems fell by 18 percent (8 million people).
• The number of publicly owned systems remained steady, but overall added 24 million customers to their networks.
• The average public water utility charged $316.20 for 60,000 gallons a year, while the average for-profit water company charged $500.96 for the same amount.
• Private systems in New York and Illinois charge twice as much as not-for-profit public systems.
• In Pennsylvania, private systems charge 84 percent more than public systems—$323 more a year, typically.
• Private systems in New Jersey charge 79 percent more—$230 more than their public counterparts.

Overall, for-profit companies own 10 percent of U.S. community water systems, 90 percent of which serve fewer then 3,300 people. In major cities, water is overwhelmingly controlled by public entities. Food & Water Watch attributes the trend towards public ownership to population migration patterns from rural to urban settings and to municipalization—the process by which a water system shifts from private to public control, or where local governments purchase small, private systems and combine them with their own public ones.

“Government utilities have a responsibility to promote and protect public health and safety, and are generally more responsive to community needs,” said Hauter. “More and more cities and towns are seeing that water is more efficiently and affordably delivered when it is controlled by a not-for-profit entity. Without shareholders expecting profits, public systems are less likely to cut corners on service, and excess funds are invested back into systems, not sent out of communities as dividend checks.”

With not-for-profit water providers serving more customers, it is particularly important that community systems receive the funding they need to guarantee safe, clean, affordable water to all. But federal contributions to water utility improvement projects peaked in 1977 at 63 percent of what was needed, dropped to record lows of 7 in 2006, and after a slight boost to 12 percent in 2010, fell back to 9 percent in 2014. From 1977 to 2014, federal funding for water utilities fell 74 percent after accounting for inflation. President Obama’s most recent proposed budget cuts funding to the State Revolving Funds for water infrastructure by another 11 percent. The proposed budget falls far short of what communities need.

To ensure that everyone has steady access to safe, clean, affordable water, Food & Water Watch recommends establishing a steady, dedicated source of federal funding for community water systems that could fund the replacement of lead pipes in schools and homes and update and replace our aging water systems across the country.

Download The State of Public Water in the United States.

Food & Water Watch champions healthy food and clean water for all. We stand up to corporations that put profits before people, and advocate for a democracy that improves people’s lives and protects our environment.

Contact: Kate Fried, Food & Water Watch, [email protected], (202) 683-4905.