Private or Public?

(Originally posted on waterefficiency.net)

By Elizabeth Cutright
Editor
Water Efficiency


In my first blog, “Titans of Industry — Should Big Business Control the Tap?”, I discussed the privatization of water delivery systems around the world. About 75% of water utilities in the US are public, and although their customers certainly can find themselves on the wrong end of a rate hike, as I stated in that first-ever blog, the not-for-profit utilities have “the luxury of using water rates to promote conservation.” But when profit is a motive, what happens?
In discussing the possibility of privatizing Chicago’s water delivery system in an article entitled, “Leasing water system could be a risky move for Chicago”, the Chicago Tribune’s Michael Hawthorne first points to the experiences of other municipalities who have made that choice, including Atlanta and, even, the Chicago suburb of Bolingbrook which, as the Tribune points out, is “one of dozens of suburbs and downstate communities furious about steep rate increases imposed by a private water operator.” Privatization is a contentious issue, and Chicago should perhaps pay heed to its neighbors—as Bolingbrook Mayor Roger Claar puts it, “We should control our own destiny, not turn it over to some private operation.”
In the past, I’ve focused primarily on international communities (like rural China and South America) that have suffered under the yoke of privatized water systems, but as Hawthorne’s article makes clear, many US towns and cities have been equally burdened by privatization. There’s Fort Wayne, IN, for example, which is attempting to buy back the remaining portion of its water system (after already successfully reclaiming one part) because of conflicts between shareholder interest and customer concerns. And as mentioned, Atlanta is also suffering under a 20-year deal with a corporate operator, which has so far resulted in “cost overruns, service problems, and breakdowns.”
Why would a community contemplate privatization? Because private water companies offer tantalizing promises to fix leaky pipes, rehabilitate aging infrastructure, and improve operations, while simultaneously offering pure and plentiful tap water to its customers. And the rate hikes? Well, that money is needed to fund future system improvements and promote water conservation.
There’s no point in making private water companies into the bogeyman, but it’s certainly worth taking a closer look at the panacea they offer. First of all, punitive incentives like water rate increases can go a long way towards reducing water waste. But, can’t positive reinforcement—like conservation education and government-sponsored tools (like rebate programs and free water audits)—be equally effective?