This is how the legislative process now works in Wisconsin. A company called Aqua America registers as a lobbyist, hires former Republican legislator and Assembly Majority Leader Steven Foti as a lobbyist, and he works to get a new law passed that will bring business for Aqua. The company has had success nationally selling its services to take over local water utilities.
So begins Bruce Murphy’s column “Will Bill Privatize Water Utilities?” in Urban Milwaukee.
When we ask ourselves “which municipality in Wisconsin asked for legislation to ease the pathway to privatization?” through AB554/SB432, it seems the answer is “none.” Rather, the legislation was cooked up between the out-of-state for-profit corporation Aqua America and our state’s elected officials. Bruce Murphy’s article goes on to discuss the dubious “savings” brought about by private, for-profit water companies and the downsides to selling (or leasing) water utilities to these companies, but it is interesting to look specifically at Aqua America, the company who lobbied for this particular legislation.
Aqua America’s logo
In 2011, citizens in North Carolina started a Facebook Community Residents Against Aqua America. While its last post was in 2013, its members have been working to fight rate increases in 2011 and 2013. This is just a small expression of the frustration those people feel at the hands of Aqua America.
Indy Week published a three-part series of articles about Aqua America in North Carolina: “Durham tries to prevent Aqua NC from reselling city water to 751 South”, “Why Aqua NC customers are furious about their service” and “Aqua North Carolina found a legal way to raise its rates — at customers’ expense”.
While these rate increase fights were going on in North Carolina, Aqua America was posting increased earnings, and quarterly cash dividend increased 7.9 percent.
More information about Aqua America’s practices has been detailed by Food and Water Watch (pdf). Here is a summary of Aqua America’s acquisition practices:
Aqua America focuses on buying water systems and hiking water prices… After taking over and building out its systems, the company seeks to increase water rates. The ability to hike consumer bills is the key to its earnings. On top of regular rate increases, the company pursues state approval to implement distribution system improvement charges to increase revenue and speed up returns.
As outlined in this Food and Water Watch document, Aqua America (Aqua Utilities) was forced out of Florida in 2012, and finally left the state in 2013. Here is what a bad “bargain” Aqua America is for the consumer:
• Aqua Utilities charged twice as much as comparable publicly owned utilities.
For a typical household within a county, using 5,000 gallons a month, Aqua Utilities charged 105 percent more than comparable publicly owned utilities, which adds up to an extra $255 a year.
• Aqua Utilities had serious water quality problems.
From 2007 to 2011, the company violated drinking water quality regulations 76 times and wastewater regulations 39 times. Many of the company’s customers complained that the company’s water was smelly, discolored, contaminated and undrinkable.
• Aqua Utilities had the most customer complaints.
From 2007 to 2011, the state Public Service Commission received 767 customer complaints about Aqua Utilities.32 In 2011, the company was responsible for more than 40 percent of all water and sewer complaints filed with the commission, and it received seven times more complaints than the regulated water utility with the next highest number.
Online “complaint” blogs, such as pissed consumer and complaints board are filled with consumer dissatisfaction. Do the citizens of Wisconsin want their water company’s billing and customer service on the level of Comcast?
When considering whether a private, for-profit corporation is the best choice for Wisconsin’s water utilities, keep in mind the words of Aqua America’s former Chairman, President and CEO, Nicholas DeBenedictis, who stepped down in 2015:
Try to remember that the shareholder is the boss. If you are doing something that isn’t going to benefit the shareholders on a year-to-year basis, you shouldn’t do it just to get bigger. You really have to come to the bottom line.