The Top Five Reasons to KeepMassachusetts’ Water in Public Hands
The research shows five main ways that private control of water is a bad deal for Massachusetts.
1. High Water Rates.
On average, households in Mas-sachusetts pay 35 percent more for water from privateutilities. That’s an extra $124 a year (see figure 1).
After United Water demanded anextra $270,000 a year to operate the city’s water sys-tem, Gardner decided to increase water rates 35 per-cent from 2006 to 2012.
In 2006, the typical Garnerhousehold already was paying $510 a year for water.
Aquarion Water Company plans toincrease Oxford’s water rates by 33 percent to financea treatment plant for another town. The typicalhousehold will have to pay an extra $110 a year.
2. Expensive Financing of Water and Sewer Projects.
Private financing is far moreexpensive than public financing (see figure 2).
From 2006 to 2007, even the best-rated corporate bonds were 15 percent more expensive than typicalmunicipal bonds issued in the state, and 250 percentmore expensive than loans from Massachusetts’ StateRevolving Fund program.
3. Clean Water Act Penalties.
In Massa-chusetts, private operators of major sewage treatment plants were nearly three times more likely than their public counterparts to have received penalties in the last five years for violations under the Clean Water Act (see figure 3).
Penalties can translate into higher rates forconsumers.
In 2008 the MassachusettsDepartment of Environmental Protection citedGloucester for sewer overflows at its wastewatertreatment plant, which is operated and maintained by United Water. Later that year, the city entered intoa consent order with a $24,720 penalty because of the system’s long history of noncompliance related tofailures and operation and maintenance problems.
In 2008, after the fourth wastewater overflow in two years, dozens of residentsmet with the Cohasset sewer commission and Veolia,the private operator, to demand that the wastewatersystem stop spilling sewage in their backyards.
4. High Operating Costs.
Public control is abetter deal for the ratepayer and the taxpayer.
Private management of a sewersystem project cost Lynn nearly twice as much ascomparable work under public control. The city paidan extra $22 million. The commonwealth’s inspectorgeneral said that although Lynn’s leaders paid morethan $3 million to privatization consultants, “thisexpensive investment in expertise has not protectedratepayers from a bad deal.”
The waters of Massachusetts must remain public to keep the resource safe and affordable.
When drink-ing water and sewer systems fall into private hands, costs multiply and consumers end up paying too much for waterthat becomes a commodity for shareholders. It can lead to sewage spills and service problems. Because of these fail-ures, taxpayer money should neither incentivize nor subsidize private ownership, management or operation of waterand sewer systems.
Figure 1: Annual Water Bill of the Typical Household inMassachusetts Using 7,500 Gallons a Month