Telling someone who cannot drink their tap water that selling the pipes to a corporation is the solution is especially cruel. However, after Jackson, a city of 150,000 residents, spent days in the summer of 2022 without consistent access to clean drinking water, the governor of Mississippi essentially suggested that.
After that, the boil notices continued to arrive. Locals are checking labels, filling pots, and wondering when things will get back to normal. Really, it hasn’t yet. “Elite capture of our water commons is the final frontier in the commodification of all living things.”
— Community Water Justice’s Nickie Sekera
| Topic | Water Privatization in the United States |
|---|---|
| Americans on private water systems | 73 million+ |
| Key corporations involved | Veolia Environnement, Essential Utilities, Suez, Artesian, New Jersey American Water, Siemens Corp. |
| UN declaration on water | Resolution 64/292 (2010) — recognizes safe drinking water as a fundamental human right |
| Infrastructure investment needed | $23 billion per year over 20 years (Water Infrastructure Network estimate) |
| Wall Street water investment funds | Over $100 billion ready to deploy into private water rights (Food & Water Watch) |
| Bayonne, NJ rate increase | Nearly 50% since 2012 contract with Suez and KKR |
| Key opposition groups | Food & Water Watch, Community Water Justice, NAACP Legal Defense Fund (Thurgood Marshall Institute) |
| Notable legislation | Fair Market Value laws (passed in ~12 states including Florida) allow inflated utility valuations to attract buyers |
| Jackson, MS wastewater dumped | ~5 billion gallons untreated into the Pearl River (March 2020 – Feb 2022, under Veolia subsidiary contract) |
Jackson had attempted the private route before. In order to manage its wastewater plants, the city entered into a ten-year contract with a division of the massive French company Veolia Environnement in 2017. The Pearl River received almost five billion gallons of untreated or partially treated wastewater between March 2020 and February 2022. In the end, Siemens Corp., which had a separate contract, paid $90 million to resolve complaints regarding its inability to repair the city’s water metering system. The efficiency argument is nullified.
Over 73 million Americans now depend on private businesses for their wastewater or drinking needs, a significant increase over the previous five years. The President’s National Infrastructure Advisory Council, which suggested removing obstacles to privatization in community water systems, hasn’t exactly resisted the National Association of Water Companies’ strong push for that number to increase. It is worthwhile to inquire about the precise beneficiary of that recommendation.
On the surface, the case for privatization is not wholly pessimistic. According to Chris Edwards of the Cato Institute, financing becomes more stable when water systems are taken out of political control. “When something is run by the government, there’s always fighting over appropriations and micromanagement,” he states. It’s true that underfunded public systems in underperforming cities have allowed pipes to corrode for many years.
Last year, Salem, New Jersey, decided to sell its water and sewer systems to New Jersey American Water. This decision was made in part because the city is deeply in debt and cannot afford to clean up PFAS chemical contamination on its own. There are moments when the funds truly run out.
However, there’s a difference between a community that has run out of options and a community that a well-funded lobbying machine is pushing toward a particular option. Businesses like Essential Utilities, which owns over 1,500 public water systems nationwide, have been actively advocating for fair market value legislation, which permits water utilities to be valued using their purchase price or appraised value rather than their depreciated cost.
These laws have been passed in about a dozen states, with Florida being one of the most recent. “There’s both a political and a marketing machine driving outsourcing privatization,” states Donald Cohen, co-author of The Privatization of Everything. Observing the legislative pattern develop state by state makes it difficult to disagree.
What does fair market value legislation really mean in real life? It implies that the asset’s price increases, and the markup must be covered by someone. The ratepayer is that person. Last year, a Pennsylvania court decided that regulators shouldn’t have permitted the sale of a municipal sewer system because doing so would have doubled customer rates.
It was an uncommon institutional reversal of a largely uncontested trend. Food and Water Watch’s Mary Grant doesn’t hold back when she says that the substantial sums of money that businesses give local officials for outdated infrastructure “are not free money.” Your constituents will simply have to pay that debt with their water bills.”
This is more evident in Bayonne, New Jersey, than anywhere else. In 2012, the city leased its water system to Suez and Kohlberg Kravis Roberts, a private equity firm, under a 40-year agreement that guaranteed the partners over half a billion dollars in revenue. Since then, water prices have increased by nearly 50%. A foreclosure risk concealed within a utility bill was discovered by residents who were unable to keep up and had liens placed against their homes. At first, the companies said that rates would remain stable for a number of years. They didn’t. Customer relief is limited by the math of an 11 percent guaranteed rate of return for 40 years.
The question of commodification extends beyond the pipes. Food and Water Watch reports that investment funds have more than $100 billion available for private water rights ownership. There will eventually be people who sell water and people who want to buy it, according to T. Boone Pickens, who was once the biggest private water owner in the United States. He intended it to be an observation. It reads more and more like a strategy document.
In 2010, the United Nations established Resolution 64/292, or safe and clean drinking water, as a human right. It simply meant that you can’t charge people so much for water that they refuse to use it. That idea is directly violated when water is treated like a commodity, subject to market rates and shareholder expectations.
Private water companies have every reason to increase rates and reduce operating expenses in order to maximize profits. Due to their disproportionate reliance on the outdated, failing systems that initially draw privatization deals, low-income residents and communities of color are the groups most likely to feel that squeeze.
The image isn’t entirely depressing, though. In southeast Pennsylvania, locals near the Chester Water Authority waged a persistent battle against an Essential Utilities subsidiary’s takeover. Last spring, Jackson water employees protested their city’s private contract. I
n order to give locals a say in a decision that would affect their water bills for decades, Food and Water Watch collaborated with local activists to get the question on the ballot at all, even in Salem, where the privatization vote was overwhelmingly successful.
There is no law of physics that states that the current wave of ownership of American water systems will last forever. Ownership has previously alternated between the public and private sectors.
Whether communities will have the legal resources and political will to hold the line is still up in the air. The trajectory is clear. Every fair market value law that is passed, every financially strapped city that sells its pipes, and every 40-year private equity contract that is signed reduces the room for reversal. Water is not a luxury that some people can afford while others can live without it.
It’s hard not to feel as though the most essential resource of all is being handled like any other asset class while this slow transfer is taking place, and that someone, somewhere, is running out of time to say no.
