Archives › Privatization
If you’ve followed the recent history of Illinois American Water Co. on this blog, you would know that recent rate case filings at the ICC (Illinois Commerce Commission) have been met with a whole lot of public opposition. The company has been attempting to increase its rates in virtually all of its subsidiary service areas, [...]
I came across an excellent paper on utility economics the other day during some internet research. The paper stands out for its focus on regulation of natural monopoly businesses, which specifically include water and sewer utilities. Natural monopolies are defined as an industry where a single firm can produce output to supply the entire market [...]
I recently gave an interview to writers at Waterwideweb.org. The resulting article is worth a good read, as are the comments.
Public Works magazine is one of many, perhaps the latest, reporting on the huge gap in funding between our water and sewer infrastructure needs and current annual spending. The problem isn’t new. Water and sewer infrastructure have been aging unabated for 50 years or more and its no surprise to anyone that water pipes, pumps, [...]
Just last year, we saw Indianapolis reach a new public-private partnership involving the sale of the city’s water and sewer utilities to a not-for-profit cooperative. Today there is news that the City of Nashua, located in New Hampshire, is set to acquire 100% of the capital stock of the Pennichuck Corporation in a deal that [...]
The USEPA’s Community Water System Survey released in 2009 provides more evidence that private utilities do not provide services at a net benefit to customers. Although the survey shows that the actual cost is lower at private utilities than for public ones, those savings evaporate once private owner profits are considered. If you factor in [...]
The Kentucky PSC has decided to allow the Kentucky American Water Co. a 29% increase in its water rates. The average residential customer will see monthly bills increase from $27/mo to $35/mo, or about $96 per year. The PSC had considered this case for about 10 months. We first reported the filing on this blog [...]
Blogging live from the water marketing conference today. Our talk went very well. We highlighted the business model of utilities and described the pricing constraints based on the regulatory model. Government utilities regulate prices based on Direct Ownership where elected officials approve rates. Those rates must not be arbitrary, unreasonable, or capricious. The best way [...]
For many months we have tracked the activities of private water companies in America through their requests for – most large – rate increases. We have an entire category on this blog dedicated to these activities listed under “privitization” on the right sidebar; give it a click to get some of the astounding history behind [...]
In these tough times, some cities and local governments are considering selling their water and sewer utilities to private concerns. USA Today ran a story on this recently: “Cities consider selling water, sewer systems for cash“. The issues raised in the USA Today story are interesting. As noted on this blog, we’ve seen at least [...]
The Illinois American Water Co. (subsidiary of much larger American Water Works Co. – AWK) is seeing new scrutiny from the Illinois Commerce Commission on its proposal for 30% increases in water rates for many Chicago-area utilities that it operates. The rate case has made its way to the ICC where Illinois Attorney General Lisa [...]
The City of Indianapolis, whose privately operated water system (Veolia has been the private owner/operator for several years) was ever so recently facing a 35% increase in water rates just 6 months after an 11% increase, has even more recently decided to scrap their private ownership model. “With this agreement, I am rejecting private ownership [...]
Illinois, Indiana, Missouri, Arizona and now Kentucky. We’ve been tracking American Water Co. all year and reporting on the large increases that the company has requested in each of these states. Kentucky is the latest. The increase requested there is 37%. The Kentucky American water rate increase contains very similar elements to all the others [...]
In the continuing saga of American Water and its wide scale requests for large increases in water utility rates in its service areas nationwide, we find the latest such request for its Arizona affiliate. Water Utility Rates will go up in Sun City, AZ by 28% and wastewater rates by 40% under Arizona American’s proposal. [...]
A VP for United Water New Rochelle recently published a letter explaining the reasoning behind the company’s requested rate increase that is now being considered by the NY commission (click here to read the full letter). He brings out a couple of points in the letter that bear additional commentary. “Capital improvements are not a [...]
As the Global Water rate case in Arizona unfolds, we are starting to see “under the skirt” of the water utility that is seeking a 34% increase to its approved water rate and 130% for its sewer rate. We were pretty sure that we would see some fireworks in this case given the size of [...]
As Global Water’s testimony supporting its requested rate increase before the Arizona Commerce Commission begins, we are starting to see a small glimpse inside what can be a very involved process. Rate cases are not new: they are the rule for privately owned utilities and have been part of our history since pre-1900 times. Your [...]
A pattern is definitely developing for American Water Co. We have been tracking their activities through news releases since earlier this summer. Already, we have blogged about the large increases requested of the utility commissions in Illinois, Indiana, and Missouri. Now, we can add the company’s Arizona affiliate to the list of suspects. Water rates [...]
It looks like American Water Co. is out to get back in the black on a national scale. We now have three examples, all within the last 30 days, of subsidiary companies of American Water seeking very large rate increases in different service areas. Add the Veolia case from Indianapolis, and we have four examples. [...]
Privatization is thought by many to be a panacea for lowering costs for water and wastewater systems. Yet, here we have again another example of how a private owner/operator, in this case Indiana American (subsidiary of American Water, NYSE: AWK), seeking a very large increase in rates (click here for the news story). We have [...]
The Illinois American water company serving about 10,000 customers in the Chicago area has asked the Illinois Commerce Commission to approve a 30% increase in water rates and a 50% increase in sewer rates. What the protesters probably don’t understand, and what everyone who thinks substituting public ownership of their water/sewer utilities with private (corporate) ownership needs to know is that the private utility owner has a constitutional right to charge rates that will allow it the opportunity to earn a reasonable profit.
We often hear how private utility companies can achieve efficiencies in their water and sewer operations that will result in community benefits (like lower water and sewer rates). For a period of time in the US there was an active market where major cities were selling their utility concessions to private corporations. Veolia was one [...]