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CWFNC Releases Report on Water Privatization

Today, Clean Water for North Carolina releases our new report, “Privatizing NC’s Water, Undermining Justice.” This 50-page report describes the growing trend of water privatization in North Carolina and the impacts private water and sewer companies are having on water affordability, customer service, and water quality (read the 2-page executive summary).

The report, based on extensive research and outreach to impacted communities during the last five years, finds that many residents in the growing number of NC neighborhoods receiving service from private water utilities have experienced exorbitantly high water and sewer rates, difficulties holding companies accountable to protect their interests, and frustration with the NC Utilities Commission and its Public Staff for ignoring consumer concerns when allowing privatization to occur and setting private companies’ rates.

Privatization in NC mostly affects the state’s numerous small, rural water systems. Aqua North Carolina has been steadily buying up small systems over the past decade, while Utilities, Inc. also owns a number of systems in the state. Utilities Commission policies encouraging private ownership and larger corporate acquisition of water supplies have supported this trend. By incentivizing Aqua NC’s purchase of “troubled” systems (systems needing infrastructure repair or with chronic water quality problems), the Commission subsidizes the company’s investments, apparently believing that it will provide a good solution to aging infrastructure. However, under the current method of calculating rates, these investments can drive up the company’s total allowable profit and drive up individual customers’ water rates, with no mechanisms in place to ensure that expenditures are distributed fairly to the customers whose need is highest. “Consolidated” rates, in which all customers of a company across the state pay the same rates, can also place disproportionate burdens on some communities without bringing improvements.

CWFNC is especially concerned about NC’s low-income neighborhoods and households, who are the most impacted by high rates, and yet often do not see improvements to their water quality or service when private companies take over. These concerns also extend to residents in NC mobile home parks whose owners have recently switched from including water “in-rent” to charging residents separately for water, often without a subsequent rent reduction or necessary maintenance to ensure that pipes are not leaking.

Access to clean water is a human right. The recommendations in this report provide a path for NC to reform its policies to ensure that the most vulnerable neighborhoods and households are not hurt by high rates, while private companies profit.

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