NCPA - National Center for Policy Analysis

Public Take Over of Private Water Companies

August 26, 2013

Water fights are simmering in small towns across the country this summer as rate increases irk residents and spur local governments to try to take over privately-owned water systems. Municipalities in Massachusetts, California and Texas have recently filed lawsuits or set ballot measures in a bid to gain control of their water systems. Private firms have defended their rate increases -- saying they have had to spend money to improve the infrastructure and are entitled to make a profit, says the Wall Street Journal.

Residents of Ojai, a small town in Southern California, will vote later this month on whether to fund the purchase of the water system serving them. In Blue Mound, Texas, the mayor has vowed to appeal a July court ruling that prevented his town from operating its water system. Also last month, a trial concluded in Superior Court in Worcester, Mass., in a lawsuit filed by Oxford, Mass., over the sale of its water infrastructure. A judge's ruling is pending.

  • According to a 2012 report by Food and Water Watch, a group that supports public control of water systems, the privatization trend is waning.
  • Using Environmental Protection Agency data, the group estimated that between October 2007 and October 2011 the number of Americans served by privately-owned systems fell 16 percent, while the number served by public ones rose 8 percent.

Michael Deane, executive director of the National Association of Water Companies, says although some of the towns attempting to take over their water systems have received a lot of attention, other cash-strapped ones are still turning to private companies. Private community water systems served about 42 million Americans in 2012, and public systems served some 300 million, he says.

Source: William Harless, "Towns Try to Take Back Water Systems," Wall Street Journal, August 19, 2013.


Browse more articles on Government Issues