Blog

There are Benefits to Having Water Systems Run by Private Companies, Trade Group Says

In a NJ.com op-ed, Tom Churchelow, the senior director of Government and Public Affairs for the New Jersey Utilities Association, exposes the scare tactics used by Food & Water Watch to dissuade communities from considering solutions provided by water companies. He deconstructs the activist group’s claims about Newark and Trenton to show how the group never offers actual solutions, but instead relies on fearmongering and misinformation. Read the full article below:

The recent op-ed, Corporations can’t fix Newark’s water problem, by Matt Smith of the Washington D.C.-based lobbying group, Food and Water Watch (FWW), and Anthony Diaz is pure fearmongering and fails to present a clear picture about the many resources private water companies can offer in helping New Jersey communities, like Newark, address water infrastructure challenges.

FWW’s recent foray in New Jersey is the not the first time they’ve been vocal in the Garden State. While their tactics may vary depending on the community, two things about them are consistent – FWW offers no solutions and works only to agitate and scare residents into opposing private investment. And when FWW has accomplished that, they leave the residents they claim to support with the same broken system and no private investment option to fix it.

In 2010, FWW held a relentless campaign to oppose the purchase of municipally owned water assets in Trenton by New Jersey American Water. The sale was rejected by voters, and since then, the city’s experiences with boil water advisories and water treatment violations have been well documented. In true irony, the state of water infrastructure in Trenton was so dire that the city had to buy water on several occasions from New Jersey American Water, the very company that previously sought to invest millions in the city’s water infrastructure.

FWW is now exploiting the crisis in Newark and in doing so it is fallaciously associating the well-known problems in Flint, Michigan with private investment. In reality, the causes of the Flint crisis had nothing to do with private companies, but rather point to the failings of government-operated water systems.

For example, Veolia was tasked with a limited scope in Flint that did not involve testing for lead, which the company was explicitly told was the responsibility of the city and state. Had Veolia been running the system outright, these challenges would have been much less likely to occur. This is a statement backed by research and actual facts.

Just this year, a study published in the Proceedings of the National Academy of Sciences, one of the world’s most-cited and comprehensive multidisciplinary scientific journals, found that privately owned utilities are far less likely to have drinking water violations than their government-run counterparts.

Furthermore, a recent report from the Bipartisan Policy Center, a group founded by high ranking Democrat and Republican leaders that studies issues important to American families, found that the private sector can play a major role in ensuring water affordability and recommended policy changes that promote partnerships between the public and private sectors, noting that these partnerships often result in lower operating costs and improved service by de-politicizing rates and providing necessary capital to improve infrastructure. In fact, public-private partnerships have been shown to lower the cost of providing water services by upwards of 24 percent.

You don’t even have to leave the Garden State to see the benefits of private investment. The facts show that the environmental record of New Jersey’s investor-owned water utilities is exceptional. In fact, in New Jersey systems owned and operated by investor-owned water companies are 58.9 percent less likely than government systems to have a health-based Safe Drinking Water Act violation.

Investor-owned utilities are also regulated by the New Jersey Board of Public Utilities (BPU) for the price of their service. Private, regulated utilities under the BPU’s jurisdiction are required by law to provide service at rates that are “just and reasonable” and must prove their investments are “prudent.” The BPU has a statutory obligation to ensure that the private regulated utilities provide “safe, adequate and proper” service. Governmental utility customers do not have this protection.

Finally, shifting ownership or control of a water system from a municipal body to an investor-owned water utility does not affect the state’s Department of Environmental Protection’s water supply primacy or the requirement for a utility to obtain Water Allocation Permits.

Ultimately, the facts paint a clear and distinct picture despite Food & Water Watch’s inability to acknowledge — private investment in water systems pays dividends for New Jersey’s residents and businesses. While government officials look to find solutions to the crisis in Newark, they would be well-served to ignore the agitators’ spin and scare tactics; rather they should review the facts to make their own decisions on how best to fix their troubled water system. Given their lack of transparency in funding, it’s hard to know FWW’s motive for wanting to take any viable option off the table, but it’s easy to see through their game.

Share this on:
Return to Blog →