The dangers of privatized drinking water

Cash-strapped municipalities nationwide are under pressure to privatize their water systems, and with the Trump administration touting privatization as the way to rebuild aging infrastructure, that pressure is about to increase. But privatizing drinking water has often not worked out, and some communities are choosing instead to “remunicipalize.” 

Downstate New York is on the front lines of the issue. There’s a controversial Public Service Commission decision looming about private water management, along with a brewing ratepayer revolt, in the Hudson Valley's Rockland County. The result of this decision in Rockland will set a precedent for state water policy, and serves as a cautionary tale about what communities across the United States could soon be facing if they succumb to water privatization.

Most of Rockland’s water infrastructure is owned by Suez North America, a subsidiary of the $15 billion multinational Suez Environnement. The company charges Rockland some of the highest water prices in the United States. Yet residents complain of frequent service interruptions, metallic tastes, bad smells and persistent brown, unusable water, 

Now Suez wants additional rate increases to reimburse it for $54 million in planning costs for an aborted desalination project. The state Public Service Commission recently deemed about $40 million of that, plus mounting interest, eligible for ratepayers to pay, prompting a lawsuit from Rockland County. 

Desalination – a last resort for arid regions – would have been an exorbitant waste of money for this community, the fifth wettest county in New York. After a public outcry, the commission ordered Suez to abandon desalination and seek alternative water sources for Rockland, especially through conservation and repairing leaks, which now waste about 25 percent of the system’s water. Suez staff and consultants drafted a plan, which the PSC modified into a joint proposal. It is New York’s first proposal for a comprehensive water conservation plan, and PSC Chairwoman Audrey Zibelman promised it would be a model of sustainable water policy for the whole state.

That was the right vision, but the reality falls far short. Besides charging ratepayers for the desalination boondoggle, the proposal does the bare minimum under PSC requirements to fix leaks and conserve water. An independent study found a stronger program of conservation and leak repair could save nearly twice the water the Suez proposal does for little additional cost. It also botches rate redesign, fails to work with local stakeholders and lacks transparency or accountability.

The Suez Joint Proposal would set a terrible precedent in New York for private companies to get away with managing communities’ water resources to the lowest possible standard, while charging the highest fees they can. It stands in sharp contrast to the Cuomo administration’s leadership in proposing a $2 billion initiative on water quality, or its forward-thinking Reforming the Energy Vision energy strategy.

Of the 24 groups that were parties to negotiations on the Rockland water proposal, only Suez and the Public Service Commission have endorsed it. The other 22 oppose it, including the county of Rockland, all five of its towns, Rockland’s Water Task Force and 19 citizen and environmental groups.

The PSC will rule on the proposal on Jan. 24. If it’s approved over nearly unanimous local rejection, it risks rebellion. Many argue that compared to Suez, the public sector could do a better job of management and conservation for 20 to 25 percent less money. Ratepayers increasingly question why they should pay millions to a multinational corporation whose incentive is to maximize shareholder profit rather than protect and manage water resources sustainably and cost-effectively. One local group has already formed to explore a “Take Back Our Water” movement.

Suez and the Public Service Commission can still turn this situation around. If it wants private water management to work, the PSC should throw out Suez’s self-serving proposal and direct it to collaborate with local groups on a better one that serves the public. 

Suez’s parent company’s tagline is, “We are at the dawn of the resource revolution.” But in Rockland, it is courting counter-revolution. Suez’s poor track record in the U.S. is one indicator that private companies managing communities’ water may not have any interest in working with local stakeholders and serving the public interest. That doesn’t bode well for Trump's national push for infrastructure privatization.

George Klein is a director of the recently formed Citizens for Rockland Water Inc.