The Top Five Reasons to KeepNew Mexico’s Water in Public Hands
The research shows five main ways that private control of water is a bad deal for New Mexico.
1. High Water Rates.
The typical New Mexico house-hold pays 37 percent more for water from a private utility than for service from a municipality. That’s an extra $97 a year (see figure 1).
2. Expensive Financing.
Private financing is far moreexpensive than public financing (see figure 2).From 2000 to 2007, even the best-rated corporate bond was 45 percent more expensive than a typical municipal bond issued in the state, and 168 percent more expen-sive than loans from New Mexico’s State Revolving Fundprograms.
3. Clean Water Act Violations.
Compared to theirpublicly operated counterparts, privately operated majorsewage treatment plants were five times more likely tohave alleged significant violations of the Clean Water Act(see figure 3).
4. High Operating Costs.
Public control is a betterdeal for the ratepayer and the taxpayer.
In 2008, the state Public Regu-lation Commission chastised the Eldorado Water andSanitation District for what it called “extraordinarily high” operating expenses. The criticism centeredon the district’s management contract with CH2MHill’s Operations Management International, Inc.The regulatory commission recommended that thedistrict replace its contractors with full-time publicemployees to save money.
5. Wasteful Water Practices.
Private utilities oftenavoid water conservation measures, which drive downrevenue and profit. Instead of repairing leaking pipelinesand reducing water usage, corporations often pursueexpensive new water supplies.
Albuquerque and Rio Rancho (water and sew-er).
In 2009, Albuquerque Bernalillo County WaterUtility Authority purchased a water system fromNew Mexico Utilities, Inc., a subsidiary of Southwest Water.
The public authority believed the takeover was the only way to protect the area’s water supply. According to the authority, the company refusedto enact an effective water conservation plan and,instead, sought to pump six times more water fromthe aquifer. The authority worried that the company’s water use could cost the authority’s customers morethan $50 million.
he waters of New Mexico belong to the people of New Mexico,
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 New MexicoHousehold Using 6,000 Gallons a Month (2007)