Recent News

The inflation no one is talking about

Corporations that run privatized municipal water systems are raising rates to enrich their shareholders and even buy up more public systems.

Although inflation cooled in July, prices are still sky-high relative to last year. Headlines focus on the cost of energy and housing, but what about one of the most basic human needs, water?

Just ask the people served by Illinois’s biggest private water corporation, Illinois American Water. They’re facing large rate increases for both water and wastewater service.

Like most things, water rates tend to rise over time. In fact, they’ve gone up 43 percent across U.S. cities in the past decade, more than any other utility. But rates in privatized systems—like those managed by the corporation Illinois American Water—can rise dramatically.

A 2017 Chicago Tribune analysis found that Illinois American and fellow private water company Aqua Illinois charged customers 20 percent to 70 percent more than municipal system customers.

Why? As Food & Water Watch writes, “Investor-owned water utilities charge higher water prices than municipalities, mostly because of profits, taxes, and debt costs.” In other words, the investors who buy up water systems need to get paid.

And Illinois American is about to get paid. The corporation recently asked the state government if they could raise rates a collective $100 million across their systems statewide. They want a 10.25 percent return on their investment, or profit for shareholders.

But here’s the real kicker: Under an absurd state law, private water corporations can actually charge customers higher rates to cover the cost of buying up other public water utilities.

That means that to grow their company, Illinois American is forcing people to pay higher rates rather than risking their own capital. Since 2020, they’ve acquired 10 public water systems across the state.

In total, Illinois American and Aqua Illinois customers have paid more than $260 million in higher rates to cover dozens of purchases.

But there is good news. People are fighting back. The Citizens Utility Board—a state-backed watchdog organization—is arguing for a lower rate increase and working to pass legislation that would give customers more voice before private water corporations buy up public systems.

A few states east in Pennsylvania, which is a hotbed for water privatization, a number of battles are heating up. Residents of Towamencin are packing public meetings to stop the sale of their town’s water system. They even formed a group called Neighbors Opposing Privatization Efforts (NOPE). Elected officials across Bucks County are stepping up to oppose the sale of the county’s water system to Aqua Pennsylvania.

In California, a member of the Los Angeles-area Central Basin Municipal Water District and a local journalist are fighting back after other members tried to silence their concerns about harmful chemicals in the water. The member recently wrote, “The water privatizers on the Central Basin Board of Directors … who are bought and paid for by private water interest … [have one goal,] to privatize and profit from our community water systems.”

This is all to say, water is a public good, meaning it must be under our control. But we have to fight for it, because to corporations, it’s just another way to increase profits for their wealthy executives and shareholders.

Article by Donald Cohen

Read the original article here: https://inthepublicinterest.org/the-inflation-no-one-is-talking-about/

Stay Connected

More Recent Updates