Water has been called the oil of the
21st century. The World Bank predicts that by 2025, two-thirds of
the world’s population will not have enough drinking water. With
scarcity making water an increasingly valuable commodity, private
companies are tempted to corner water supplies and
delivery.
“We think there’ll be world wars fought about
water in the future,” predicts the aptly named Peter Spillett of
RWE/Thames Water, one of the three largest water companies in the
world.
Even in the United States, long a bastion of
publicly owned water systems, water is increasingly viewed as
something to be bought and sold. Private companies have started
taking over municipal and suburban water systems, which gives them
monopoly control over water rates. Water “privatization,” and, most
notably, the dramatic entry of the three largest water companies in
the world to the U.S. market, threatens local control over this
precious resource.
With 85 percent of U.S. consumers still
receiving their water from public systems, the Big Three water
companies, all based in Europe, see this as a tremendous
opportunity for growth. RWE/Thames of Germany and Vivendi and Suez
of France have made an aggressive entry into this country with the
purchase of American Water Works, U.S. Filter, and United Water,
respectively. They are the three leading U.S. water
companies.
Although the Big Three’s holdings are spread
out across the United States, much of their future growth will
likely occur in the arid Southwest, where water scarcity, fueled by
suburban growth, can be expected to drive up water rates.
Paris-based Vivendi has already purchased 45,000 acres in
California’s Imperial Valley, giving it highly coveted rights to
Colorado River water, and an amount equal to 8 percent of the water
used in San Diego County.
The push for privatization has
spawned charges from customers and public officials alike of
inflated rates and poorly maintained equipment as profits are
siphoned into corporate coffers.
The differences between
private and public water companies are dramatically illustrated in
the Los Angeles suburb of Thousand Oaks. Two private companies and
one city-run operation coexist, each in a separate district that
provides water to 20,000 homes.
“We are a snapshot of the
future,” says Thousand Oaks Assistant City Manager Scott Mitnick.
He notes that the private companies charge rates substantially
higher than those of the city operation, with one, an RWE/Thames
subsidiary, charging rates that are a whopping 33 percent higher
than the city’s. RWE/Thames customers who have complaints, he
notes, end up talking to operators in Illinois.
A similar
pattern prevails in the Monterey Bay area, whose water system was
recently acquired by RWE/Thames. The system, run by private
companies since the late 19th century, is leaky and antiquated. As
in Thousand Oaks, customers with problems talk to operators in
Illinois.
Alarmed over the prospect of increased rates and
anonymous service, citizen efforts have sprung up all over the
country–from Lawrence, Mass., to Stockton, Calif.–to thwart
corporate takeovers of municipal water systems.
A court
case brought by a citizens’ coalition in Stockton resulted in the
termination, last fall, of the most lucrative water transfer
agreement in the country. It was a 20-year, $600 million contract
between the city and a joint private operation consisting of
RWE/Thames and American partner OMI of Denver.
In the
coastal town of Montara, Calif., the state’s Public Utilities
Commission ordered the transfer of a private water company back to
public ownership after the privately owned system had experienced
numerous breakdowns and several changes of ownership coupled with
rate increases. RWE/Thames was the last private operator of the
system.
“Every time it changed hands, rates went up,”
notes Scott Boyd, president of the now publicly owned Montara Water
and Sanitary District. Faced with mounting water bills, Montara’s
citizens expressed their clear preference for the return to a
public operation, with 80 percent voting for the bonds needed to
purchase the water system. The new public system has begun
funneling money into the repair of what Boyd calls a “uniquely
decrepit” system.
There is an inherent contradiction in
the notion of reaping profits from the delivery of a life-giving
resource. The huge size of the companies now moving into the U.S.
market only exacerbates the disconnect between water provider and
water consumer. Governments or public water districts are typically
involved in the delivery of water because we literally can’t
live without water. Letting it fall under the control of companies
based in Germany or France may be a boon to their shareholders, but
not to those who depend on their water.
Tim Holt
is contributor to Writers on the Range, a service of High Country
News (www.hcn.org). He is an environmental writer who lives in the
Mount Shasta region of California.
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