The Top Five Reasons to KeepTexas’ Water in Public Hands

WATER

The research shows five main ways that private control of water is a bad deal for Texas.

1. High Rates.

The typical Texas household pays 43 percent more for water and 102 percent more for sewerservice from Texas American Water than for municipalservice.

That’s an extra $384 a year (see figure 1).

Conroe (water).

Residents in the Crighton Woodssubdivision of Conroe want the city to take overtheir water system from Aqua Texas. Comparedto households with city water, Crighton Woodshouseholds pay an extra $625 every year for 25,000gallons of water a month.

Henderson County (water and sewer)

. In 2009,a customer of Monarch Utilities, Inc., a subsidiary of Southwest Water, will pay $171 a month for using10,000 gallons of water.

That’s more than $2,000 a year for water and sewer service.

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 27 percent more expensive than a typicalmunicipal bond issued in the state, and 120 percentmore expensive than loans from Texas’ StateRevolving Fund program.

3. Clean Water Act Violations.

In Texas, privately operated major sewage treatment plants were 32 percent more likely to have received notices of CleanWater Act violations in the last five years (see figure 3).

4. High Operating Costs.

Public control is abetter deal for the ratepayer and the taxpayer.

Houston (water).

In 2007, Houston saved 17percent, or $2 million, on the operation costs of itsSoutheast Water Purification Plant by canceling itscontract with American Water and assuming publiccontrol. The next year, Houston took over its North-east water purification plant, and it expected savingsof about 8 percent, or $800,000, in the first year of public operation.

Laredo (water).

After two years of operatingLaredo’s water system, United Water sought more

he waters of Texas belong to the people of Texas,

and the resource must remainpublic to keep it safe and affordable. When water and sewer systems fall intoprivate hands, costs grow and consumers end up paying too much for poor-quality water. It can lead to sewage spills and service problems. Because of these failures,taxpayer money should neither incentivize nor subsidize private ownership,management or operation of water and sewer systems.

Figure 1: Annual Water and Sewer Bills of a TypicalTexas Household Using 5,000 Gallons a Month

MunicipalUtilitiesMunicipalUtilitiesTexas AmericanWaterTexas AmericanWater

$307$246$440$497

0$100$200$300$400$500