How Public Is Your Water?
Photo via Flickr user Seika
Impact Water

How Public Is Your Water?

The power struggle is on.
May 3, 2017, 3:30pm

Your tap water is largely considered a public good, but that doesn't mean it's guaranteed to be controlled by the government. Privatization matters as it strips accountability measures the public sector is held to when making decisions about water systems. Even if your local water system is not privately owned, that doesn't signify that it's not contracting out privatized management of your water's distribution. In an age of constant threats to arguably our most important natural resource— including a pending federal infrastructure bill in the works that by and large leaves out water protection and incentivizes privatization—let's take stock of who's controlling the water we consume on a daily basis.

Almost nine in 10 Americans drink water from publicly owned water systems. The sentiment toward public ownership of these water systems has been growing due to public systems' provision of better quality water at lower costs, more equitable service, and public health improvements. Of course, public water systems have varying track records. The water crisis in Flint, Michigan—which has a publicly owned water system but underwent massive budget cuts—has gripped the public's attention since 2015, when a pediatrician recognized the signs of lead poisoning in her patients. Yet New York City's water system—which as Food & Water Watch expert Mary Grant told me, has the "champagne of tap water"—is also publicly operated.

Privately owned water systems service most other Americans; there's also a small group that receives their water from water systems with public-private, mixed ownerships. And to further complicate the issue, many publicly owned water systems engage in varying degrees of privatization through contractual agreements with for-profit companies. Here's a breakdown.

Public Ownership vs. Private Ownership

A Food & Water Watch report surveying Environmental Protection Agency (EPA) data has found that 87 percent of Americans are served by publicly owned community water systems. Privately owned systems serve 12 percent of the U.S. population.

Just under a quarter of privately owned water systems are comprised of for-profit water companies—the rest are non-profits or ancillary systems. But for those serviced by the largest for-profit water companies, the financial disparities are stark: on average, they are charged 59 percent higher water utility fees annually than that of large publicly owned water systems.

For example, large private systems in Pennsylvania billed their customers 84 percent more than those being served by public systems in the state, which amounted to an additional $323 per year, per household. This type of rate hike scrapes the surface of problems that have arisen from private water systems who do not have to operate with the accountability measures to which public systems are bound by law.

Public-Private Partnerships

Mixed ownership of water systems are direct public-private partnerships that form between multiple governmental entities, non-profits, non-governmental organizations, community-based organizations and public sector trade unions. As of 2014, just 1 percent of the U.S. population was served by these water systems.

Often, the term "public-private partnerships" is not referring to direct joint ownership at all, but instead refers to publicly owned water systems engaging in varying degrees of privatization through public-private management.

As Grant explained to me, the term "privatization" encompasses many different ways through which private water companies can be involved with water systems. "The outright sale is the most extreme," she said. This leads to private ownership. But between fully privately owned and fully publicly owned water systems, there are many combinations of public-private management, including shorter operations and maintenance contracts, which Grant said are common, and delegated management contracts. Indeed, the International City/County Management Association has found that 6 to 7 percent of publicly owned community water systems are actually managed by for-profits.

In 2012, Pittsburgh hired Veolia Water, a private water and waste management company, under a delegated management contract in a cost-saving attempt. The city had a history of clean water, but a severely outdated infrastructure system and upwards of $150 million in debt. With Veolia managing the city's water supply, Pittsburgh residents were subject to a 20 percent rate increase in their water utility bills. And in 2016, 81,000 families received a letter notifying them that lead levels in their drinking water did not meet the standards established by the EPA's Safe Drinking Water Act.

After discovering that Veolia had quietly cut the Pittsburgh Water and Sewer Authority's lab staff by 50 percent as well as transitioned to a cheaper corrosion treatment to protect the city's lead pipes from corroding (and chemicals infiltrating drinking water), Pittsburgh sued Veolia and ordered the water to be tested.

If the name Veolia rings any bells, it's likely due to Flint, Michigan. Grant cautioned me that though not necessarily considered privatization, Flint had a consulting deal with Veolia in which the company gave the publicly owned water system an opinion—which ultimately consisted of their assessment that the water was "safe, equal, compliant." As would become apparent, Veolia hadn't actually conducted the required lead testing in their assessment.

Grant told me, "This type of consulting deal is very common in the water sector. [Companies like Veolia] recommend efficiency gains so that they can get a cut of the savings. There is a strong incentive for them to recommend cost-cutting measures that are ultimately detrimental to the environment."

Last month, Rep. John Conyers (D-MI) reintroduced his Water Affordability, Transparency, Equity, and Reliability (WATER) Act. The bill's aims include: eradicating lead from water, protecting the drinking water of Native Americans, and significantly establishing a federal fund dedicated to clean, safe drinking water. Also, it will protect water infrastructure for which only publicly owned water systems and private "mom-and-pop" systems are eligible—cutting off large private water companies like Veolia.