Illinois American Water is running a complicated show in the City of Peoria. They control the water system and they’re charging residents twice as much as what customers of neighboring public systems pay and the U.S. average.
Water privatization in Peoria mirrors issues that towns all across the country run into when they sell a public resource to a privately owned corporation. Each time it means: losing transparency, accountability, management, and reliability. In sum, local residents have little say over the operations of the water system.
How are they doing it? As we see it, they support elected officials and local social programs to hide corporate capitalism behind a philanthropic facade. They walk away with undue influence to raise water rates on local customers, and leverage their spending to quell opposition.
In Peoria, Illinois American Water is regulated by the Illinois Commerce Commission, whose members are appointed by the Governor, and confirmed by the Senate.
The CEO Council report said it well: “Municipally owned water systems have much greater latitude to assist with local economic goals and opportunities [...] A local system can construct a rate schedule that is attractive to economic development. Rates of investor-owned utilities must be approved by the Illinois Commerce Commission and do not reflect local priorities...”
Privately owned systems do not reflect local priorities, and why would they? First and foremost, their responsibility is to their shareholders. Private companies have no accountability to the public, and instead can focus on what is their single most important goal: money.
With the deadline of fall 2018 fast approaching, it’s finally time for Peorians to take their water back - but the water company is not going to go come to the negotiation table without a fight.
Already, residents across Peoria are receiving calls asking whether they prefer public or private workers to manage their water system.
Years of propaganda and messaging campaigns create doubt that a City has the ability to provide services. But, when it comes to water systems, public provision is the American way. Nearly nine out of 10 people in the United States receive water service from a local government entity. In the 19th century, private companies had controlled the water systems in many of our nation’s cities — from New York City to Seattle, Washington, to Birmingham, Alabama — but more recently, thousands of local governments had to take control of their water supplies to improve water quality to fight diseases and to improve water pressure to better fight fires.
This trend to public ownership continues today. In June, Missoula, Montana, bought its water system from a provide company to provide long-term stability and better water resource management, as well as to make necessary improvements. The system was losing more than half of its water through leaks. The city plans $30 million in investments over the next 5 years — all without raising water rates. As the mayor said: “The city of Missoula is in this business for only one reason and that’s to serve customers. Water is it.”
While it is understandable that the local union in Peoria fears that jobs may be jeopardized if the city takes over the water company, the City Council can and should include recognizing the local labor union and keeping the existing workforce as part of the municipalization effort. Not a single union worker should be dropped.
Furthermore, cities that take back their water systems experience incredible economic benefits as a direct result. Take the city of Evansville, Indiana, where remunicipalization from IAW was expected to save the city $14 million over a short period of five years. Or even the city of Cave Creek, Arizona, where the city took back their water from American Water and saved an astonishing $1,335,017.
And Illinois American Water Charitable Foundation appears to boast some impressive gift-giving, including the $75,000 to be shared by 78 Illinois fire departments through Illinois American Water’s 2017 Firefighter Grant Program in fall 2017. These initiatives sound almost convincing, until you consider the fact that the residents and businesses of Peoria and every other community serviced by the corporation have funded each and every single one of the company’s grants to the last dollar.
Can you imagine what Peoria would be like if all the water revenue went straight into the community?