The Top Five Reasons to KeepTennessee’s Water in Public Hands
The research shows five main ways that private control of water is a bad deal for Tennessee.
1. High Rates.
The typical Tennessee household pays25 percent more for water from Tennessee American Wa-ter, the state’s largest private utility, than for service froma public utility.
That’s an extra $75 a year (see figure 1).
In 2008, Chattanooga, which receives water service from Tennessee Ameri-can Water, had the most expensive water among thestate’s six largest cities. Public utilities served theother five cities.
Chattanooga households paid morefor water than almost everyone with public water didin Northwest Georgia and Southeast Tennessee,
andthe growing utility costs threatened jobs.
Sumner and Williamson Counties (sewer).
In 2009, Tennessee Wastewater Systems, a privatesewer utility, sought to raise rates by as much as 70percent, which would bring the typical household billup to anywhere from $60 to $93 a month.
2. Expensive Financing.
Private financing is farmore expensive than public financing (see figure 2).From 2000 to 2007, even the best-rated corporate bond was 28 percent more expensive than a typicalmunicipal bond issued in the state, and 192 percentmore expensive than loans from Tennessee’s StateRevolving Fund program.
3. Clean Water Act Violations.
Compared tothe their public counterparts, privately operated majorsewage treatment plants were more than three times aslikely to have had formal enforcement actions for viola-tions of the Clean Water Act in the last five years (seefigure 3).
4. High Operating Costs.
Public control is a better deal for the ratepayer and the taxpayer.
Horn Lake (water).
In 2008, Horn Lake termi-nated its contract with Southwest Water and broughtits water services in-house after the public worksdirector predicted that public operation could save 36percent to 55 percent a month.
Southaven (water and sewer).
South-aven aldermen voted not to renew its contract withECO Resources after determining that public opera-tion of the city’s water and sewer systems will save
he waters of Tennessee belong to the people of Tennessee,
and the resourcemust remain public to keep it safe and affordable. When water and sewersystems fall into private hands, costs grow and consumers end up paying too muchfor poor-quality water. It can lead to sewage spills and service problems. Becauseof these failures, taxpayer money should neither incentivize nor subsidize privateownership, management or operation of water and sewer systems.
Figure 1: Annual Water Bill of a Typical TennesseeHousehold Using 5,000 Gallons a Month
Public UtilitiesTennessee AmericanWater