TFTT Report
Study finds private water companies are more likely to meet requirements of Safe Drinking Water Act
According to an analysis of EPA data from 2010-2013, publicly-operated water systems have 24% more violations of the Safe Drinking Water Act than privately-operated water systems.
The authors of the study – associate professors David Konisky of Georgetown University and Manuel Teodoro of Texas A&M University – argue that, by nature, public operation can compromise a water system’s ability to make crucial infrastructure investments. Because rate increases are politically challenging for local officials, it is difficult for public utilities to generate the revenue necessary for upgrades and routine maintenance. As a result, the authors argue, public utilities are more likely to miss or delay crucial investments, thereby generating more violations of federal safe drinking water standards.
The study, published in American Journal of Political Science, also found that federal regulators were less likely to impose punishment on public utilities despite the higher rate of noncompliance. The authors argue that it is inherently easier for a government to regulate a private company than it is for a government to regulate another government. The threat and easy execution of fining or sanctioning a private company provides strong incentive for that company to comply with regulations.
In short, when it comes to SDWA compliance, the various models of private utility operation have clear inherent advantages over public operation. Read the full paper here.