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Opposing Water and Wastewater Privatization

Opposing water and wastewater privatization is difficult. Local politics in Pennsylvania favor the Big Water companies when they decide to target a municipal utility. The deck is stacked against the ratepayer. Big Water always enters with the upper hand.

Privatization Players

The evidence suggests that most sales of municipal utilities begin with a call from a for-profit utility to municipal officials suggesting that a sale would be beneficial. There are three important players who should have some say in the sale, the selling utility, the buying utility, and the ratepayer, who will end up paying the bill. However, the rate payer is left out of the process. This leaves it up to the local officials to do what is best for their constituents. But local officials are not always aware of all the issues. Most local officials are well meaning citizens who got involved because they wanted to make a difference on local issues. But they are not paid commensurate with their responsibilities. They need to balance their lives, which requires focus on their job and their family, leaving little time to delve deeply.

It is apparent to us that Big Water knows this. They know the local officials will listen to their side of the story, and with the offer of a large amount of money, local officials will not take the time to challenge what they are told. This leaves it up to the ratepayer to mount any challenge. But the ratepayer is left out of the process until the very last stage when the deal is essentially done.

There are cases where the sale of municipal utility makes sense. A small struggling utility in a financially struggling community could see a benefit from a sale. But if you have read The Big Water Playbook, you know that Big Water is targeting well run utilities that are not in financial trouble. In these cases, a fair evaluation of cost/benefit shows that the cost far outweighs any benefit. The PA Commonwealth Court recently took this position in the sale of the East Whiteland sewer system to Aqua PA.

Our data show that a fair evaluation of

cost/benefit of a municipal utility sale will show

that the cost outweighs any benefit.

This should be the main focus of any opposition.

Follow Local Issues

Few residents follow issues in their local community.  Most local issues are mundane and uninteresting, and town meetings are poorly attended. As a result, important decisions are often made with little or no public input.  With regularly scheduled public meetings, the local government can claim an open process and disclaim responsibility after the fact. Add this to Big Water’s tactics of purposely leaving the ratepayer uninformed, and you start at a big disadvantage. Unfortunately, most residents are caught off guard when they learn their municipality is selling a utility.

What Should You Do

Be aware

Attend municipality meetings even if the sale is not on the agenda

Or, at least read agendas and minutes.

Watch for early warning signs.

If local officials are talking about failing infrastructure, increasing regulatory requirements and they have more important things to worry about, you can bet that they have been approached by a private utility.

Then when they say they are “considering a sale”, their minds have been made up.

Get educated

Understand the playing field in Pennsylvania 

Understand the Big Water takeover playbook

Identify resources

Find someone in your community with a strong financial background. This is critical. Big Water does not want you to understand the real costs of a sale. They will present the “advantages” of the deal with vague arguments and vague financial information. The largest disadvantage, the financial burden on the ratepayer, is downplayed, if even discussed.


You need to understand the details, and talk intelligently about them. Opposition to a sale requires a clear quantitative understanding of all the facts, pro and con. This requires work, time, and tenacity. 

Understand issues specific to your community

Local officials usually claim expensive repairs or upgrades are needed. Demand a detailed, independent accounting of all repairs.

Local officials will put a price tag on these repairs. Again, demand a detailed, independent accounting of all costs, including payment options.

They will claim by selling, the buyer can perform the repairs cheaper.  Follow this link to debunk this claim.

Demand to know how rates will rise after a sale. They will claim they cannot accurately predict rates because rates are set by the PUC. Rates are determined by the amount of their investment (purchase price). They can tell you what future rates will be. Only the timing may be questionable. Follow this (future link) for more information.

Organize and Act

A lone voice will not be heard. Local officials need to know there is broad opposition.

Attend all municipal meetings, even if the sale is not on the agenda, and listen for the warning signs.

 

Ask for detailed updates at each meeting.

Be heard. Ask questions and demand answers, especially when discussing potential rate increases.

 

They will claim they can’t predict rate increases because they are set by the PUC. This is an evasive maneuver. 

Demand access to all information.

Demand a referendum on the sale. If the sale is as beneficial as claimed, there should be no hesitation to make the case and hold a referendum.

Contact your state representatives. Tell them you oppose the sale and tell them to support ratepayer protection legislation.

Testify at PUC hearings. Any utility sale will include public input hearings. Testify with facts and figures. Don’t just say the sale will raise your rates and you can’t afford it. They don’t care about that.

 

Point out the negative impact on the economy and demand a quantitative analysis of the sale to determine public good.

We Are Here To Help

We've compiled helpful information obtained from our experience as well as that of others. Contact us for help.  When you know the issues and the facts you can mount an opposition campaign. 

 

It is time and effort well spent. Once a sale goes through you will be stuck with inflated costs for many years to come.

All of this requires being well informed. Private utilities and local officials like to talk in generalities. Because they cannot justify a sale on financial terms. Build a financial case and demand answers.

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