culture, politics, commentary, criticism

Tuesday, June 27, 2006
Quenching the thirst for privatization. Yesterday's WSJ had a good article about the
utter failure of water privatization:
In Felton, south of San Francisco, [German utility and owner of American Water] RWE became embroiled in a battle with a group called FLOW, or Friends of Locally Owned Water. American Water secured ownership of Felton's water system in January 2002 when it bought the water holdings of a Connecticut company that had long controlled the asset. Eight months later, American Water, in the process of being acquired by RWE, asked the California Public Utilities Commission for approval to raise rates in Felton by 74% over three years. It noted that rates hadn't been raised since 1998 and cited the cost of infrastructure repairs.

Soon after, FLOW was formed. Members handed out literature at shops, knocked on neighbors' doors and lobbied county politicians to stir opposition to RWE. "I've had no vacation in three years. It's all I've done," says 85-year-old Frank Adamson, a retiree and FLOW member.

People in Felton complained that response times to broken water mains and the like slowed as RWE centralized operations. Accident reports from Felton were routed to a call center in Alton, Ill. Daniel Kelleher, senior vice president at American Water, says the national call center is aimed at boosting service. "It became a much more difficult project than we anticipated, and it's still a work in progress," he says. While state regulators didn't grant the entire rate increase, they decided after more than a year that American Water could raise rates 44% in Felton. Momentum grew in the community to try to take over the Felton water system and return it to public control.


In Monterey, about an hour's drive south of Felton, RWE spent more than $300,000 to defeat a measure proposing a study of whether to buy back the water system. In Chattanooga, Tenn., where water has been in private hands since the Civil War, Mayor Ron Littlefield has approached RWE's local unit about a municipal buyout. He thinks the city can save money by combining water with municipally owned power and sewer utilities. Chattanooga's water, he says, is a "private island in the middle of a sea of public utilities."

Laurel Prussing, the mayor of Urbana, Ill., became interested in a municipal buyout after a growing number of "boil orders," when people are told they must boil their water to make it safe to drink. When she tried to investigate a boil order in February, she says she was put on hold for 25 minutes before being connected to a call center in another city. An American Water spokesman disputed that boil orders have risen in Urbana and said the company distributes special telephone numbers that municipal officials can call in an emergency.
Privatization is quite often the opposite of efficiency. In the case of water privatization, all it does is efficiently remove money from communities.

Meanwhile, the UN says privatized water is "creating social and political discontent, and sometimes outright violence" in poorer countries. Poorer countries like the USA — which happens to be trillions of dollars poorer than it was just a few years ago, thanks in no small part to the privatizers, the Halliburton/Bechtel/Enron/Kinder/Carlyle GOP, a crony scheme on a global scale.

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