TFTT Report

A recent piece that appeared on the website Intercept.com is, unfortunately, the same old parroting of the same old tired claims and spin that anti-private water activists have peddled for years. There are no new claims, case studies or “facts” in the piece that have not already been discredited time and time again.

Here are the facts on Flint and Pittsburgh:

Flint’s water system had been under public control for decades. The issue in Flint was that a lack of investment and operational expertise led to poorly treated water corroding dangerously old lead pipes. Trying to blame Veolia for the disaster is preposterous and has zero supporting facts. Veolia was tasked with a very limited water testing scope — specifically looking at the residual effects of the chlorination process — and had nothing to do with testing for lead, which was the responsibility of the city and the state. When Veolia pointed out in the course of conducting its work that corrosive water conditions existed, Veolia was told to focus on the chlorination process and that lead and copper testing was being handled by the city.

In Pittsburgh, Veolia did not manage or assume control over the Pittsburgh Water and Sewer Authority (PWSA). The contract between Veolia and PWSA explicitly defined a limited consulting arrangement, where PWSA retained decision-making authority over operations, maintenance, capital spending and staffing. The authors also fail to note that email correspondence from PWSA water treatment staff clearly shows that PWSA employees made the decision to switch from soda ash to caustic soda for corrosion control, and Veolia was not involved in the decision. Furthermore, even PWSA board members agreed that the lead issue in Pittsburgh had been a problem long before Veolia entered the picture and was a result of the fact that the city’s water infrastructure was 75-100 years old.

The two main examples the authors use to try to discredit Veolia are both examples of municipally-run systems in which Veolia played a contract-limited role. In each city, Veolia’s responsibilities were very specifically delineated. By no means was Veolia running these water systems or even contractually able to make the decisions for which the authors try to blame them.

Beyond the inaccurate claims about Pittsburgh and Flint, the authors demonstrate their failure to understand basic concepts of private water utility operation and regulation by making the misleading and shortsighted argument that water rates for private utilities are in some cases higher than the rates of government-owned utilities.  In so doing, the authors fail to note that there are dozens of factors that influence water rates, including investment levels, water source, geography and water treatment needs. Because there are so many factors specific to each service area – even within the same region – it is impossible to make a true apples-to-apples comparison of rates between systems.

Experts agree that the practice of rate comparisons is unwise. In fact, the Food & Water Watch rate report that the authors reference as support for this claim cites three separate papers that each explicitly warn against rate comparisons. Citing experts that openly undercut the fundamental basis of your analysis is not the sign of a sound argument.

By making rate comparisons out of context, the authors ignore another key fact: water rates reflect water utility investment. A utility that is properly investing to maintain its system will have higher rates than a utility that defers investment. The easiest way to keep rates low is to not invest in a system, let it deteriorate and risk failure.

Keeping rates artificially low and deferring investment has serious consequences: while private utility rates may be higher in some cases, studies show government-owned utilities are more likely than private utilities – 24% more likely to be exact – to have EPA violations. This finding was further supported in a recent study in the Proceedings of the National Academy of Sciences that found, after an examination of 17,900 communities over a 34-year period, that privately-owned utilities are far less likely to have health-based drinking water quality violations than their government-owned counterparts.

The authors, unfortunately, rely on claims from the most extreme anti-private water activists in the U.S. who represent out-of-the-mainstream agendas. For example, Maude Barlow – who the piece does not mention is on the Board of Directors of the shadowy group Food & Water Watch – tries to claim that it is impossible to hold private industry accountable. This is far from the truth. To make this claim, Barlow either doesn’t know or ignores the fact that private water utilities are some of the most highly regulated operations in the country. State public utilities commissions, which are set up to ensure strong protections for consumers, regulate private utilities that own water systems. Water companies must be transparent and responsive to customers and the communities they serve – or they will no longer be in operation.

Indeed, data shows that those municipalities that work with a private water operator are overwhelmingly satisfied. According to data from Public Works Financing, 5,391 private water contracts came up for renewal between 2000 and 2015. Only 182 of those contracts reverted to municipal operation in that time, giving private water a nearly 97% renewal rate within the industry. This overwhelming renewal rate for private water clearly contradicts the picture that the authors try to paint of the industry.

The authors blatantly ignore the proven record of professional water utility operators. Private water companies have owned or operated thousands of water systems across the country, and currently provide quality services to more than 73 million Americans.  As communities weigh their options to address serious water infrastructure challenges, pieces like this that parade as fact, yet are nothing more than activist propaganda, disrupt a healthy dialogue and potentially prevent communities from considering the very options that would be of most benefit to their residents.