by Mia DiFelice
In July 2022, the Bucks County Water and Sewer Authority shocked residents when it rushed an unannounced vote on a deal with Aqua PA. The deal would have allowed Aqua PA, the local arm of $12-billion corporation Essential Utilities, to exclusively negotiate a purchase of the County’s sewer system.
The vote came after months of backroom dealing, following Aqua’s unsolicited offer during the height of the pandemic. Residents worried how Aqua would raise rates, as the company’s average rates are double the region’s.
If passed, the sale would have been the largest of its kind in the U.S., with $1.1 billion on the line. And it would have handed a public resource to a corporation with a driving priority: profit.
Water and sanitation should be managed in the public interest. That’s how we’ll secure the human right to clean, affordable and accessible water for all. But private corporations don’t see water as a right. They see it as a commodity they can profit from.
And nowhere is it easier for corporations to swoop in and gobble public water systems than in Pennsylvania.
Pennsylvania Law Lets Water Corporations Get Away With Too Much
Across the country, about 1 in 10 people get their drinking water from private companies. But in New Jersey and Pennsylvania, it’s 1 in 3. Water corporations have descended on Pennsylvania in recent years, thanks to legislation that greases the wheels on these deals.
In 2016, Pennsylvania’s Act 12 allowed corporations to buy public utilities for more than their regular book value. Corporate proposals aren’t limited by the value of the system’s infrastructure. Now, they can approach municipalities with hugely inflated offers. And they do this because they can recover the acquisition’s full cost, plus 10-11% profit, by raising rates.
After Act 12 passed, New Garden Township, PA, became the first municipality to agree to sell its sewer system. The result — rates jumped 30% when the acquisition was first announced, then an additional 37% after it was completed.
Corporations Are Exploiting Federal Disinvestment
With privatization deals, corporations exploit federal disinvestment in water infrastructure. Since 1977, federal funding for municipal water systems plummeted 77%. Disinvestment is one of the driving factors for water crises across the country. Many localities, especially in low-wealth and redlined communities, struggle to fund needed improvements when their residents can’t afford higher bills.
We see the consequences now in Jackson, Mississippi. Following the recent water crisis that came to a head after decades of environmental racism, the corporate water lobby is now preying on Jackson to promote privatization and rationalize their unaffordable water bills in the media.
However, privatization deals don’t usually fund infrastructure improvements. The sale becomes a backdoor to use water rate money for other purposes. That includes pet projects, paying off debt or avoiding property tax hikes. This practice isn’t just nontransparent — it’s fiscally irresponsible. It trades the permanent sale of a major asset for a one-time flood of cash.
And when privatization deals go through, ratepayers are hit hardest. Private water utilities typically charge 59% higher rates than public utilities. They’re also less likely to place protections against moratoriums on water shutoffs and less likely to have conservation programs (i.e., help their customers save money).
In this way, privatization exacerbates our nation’s water affordability crisis. In the U.S., one in three households struggle to afford their water bills. Each year, an estimated 15 million people experience a water shutoff over unaffordable water bills.
Water is a Right — Not a Profit Center
Running a water system comes with huge costs. The infrastructure and maintenance is expensive. Water systems are one of the most capital-intensive utilities. Because of this, water systems are natural monopolies. They face no competition.
Privatization makes these monopolies dangerous, as private corporations are accountable first and foremost to their stockholders — and the pursuit of profit. They have less incentives to consider the wide-ranging effects of their rate hikes and infrastructure decisions.
On the other hand, with local control, public institutions can check water system monopolies. Residents can vote in or out the public officials who oversee the utility. They can pressure their elected officials. They can share their concerns at public meetings.
Ultimately, water service is not a tradable good that can be sold on a market. Rather, it is a public service that is essential for life. Privatization threatens our right to water with price hikes, service shut offs and decisions that put profits before people.
A Victory Against Privatization in Pennsylvania
When news of the Bucks County deal first broke, residents went to work. Local group Neighborhoods Opposing Privatization Efforts organized to make their dissent clear. They mobilized for opposition from municipal leaders and pressured the Bucks County Commissioners to oppose the deal. Finally, in September 2022, the chair of the BCWSA confirmed that the deal was off — the sale wouldn’t go through.
As our Eastern PA organizer Ginny Marcille-Kerslake put it:
“This was a backroom corporate deal from the start, and it only stopped because local residents started to ask questions, voice their concerns, and hold their elected commissioners who have the power to change the BCWSA’s charter accountable. Getting the board to see the light and slam the brakes on this terrible deal is a huge win for clean water, public input, and democracy itself.”
The efforts of the residents of Bucks County show the power of people in the face of corporate takeovers. And it shows the value of public systems in which those most affected by changes have a voice in them. As the fight against privatization heats up in Pennsylvania and beyond, we’ll be standing with communities every chance we get.
Right now, the Pennsylvania State Assembly is considering a bill that would make privatization even easier. You can help us stop the bill and defend against water privatization in PA.
Pennsylvanians: tell your representative to reject this water privatization bill!