A Grassroots Water Grab in California

The debate about water privatization is global, but many of the battles are local.

One such struggle ended recently, when the mountain community of Felton, on California’s central coast, won control of its water supply from California America Water, a unit of international conglomerate Rheinisch-Westfaelisches Elektrizitaetswerk.

According to the Press Banner, a local newspaper, the company settled out of court with the San Lorenzo Valley Water District to avoid an eminent domain trial.

Felton residents were concerned over rising water rates and potential service disruptions, and formed an advocacy group, Felton Friends of Water, in October 2002.

The group said their victory on June 5 has inspired them to help other municipalities struggling with similar issues.

An article on environmental advocacy Web site Naturalnews.com reported that after Britain’s water system went private, prices went up 45 percent while the quality of water and service went down.

The site claims that water is not a commodity to be traded for profit, but rather a basic human need that should be held in the public trust.

But supporters of private ownership say it can improve infrastructure and efficiency, and on a global scale it can help more people access clean water.

Ronald Bailey writes in Reason Magazine that more than a billion people lack access to safe drinking water, and that privatization offers governments a way to ensure their citizens will receive clean and steady supplies.

Yet opposition to commercial ownership is robust.

In early 2007, activists from more than 40 African countries formed the African Water Network to halt privatization on the continent.

Newsdesk.org recently noted that Paris recently decided to go public with its water for the first time in a hundred years, following the lead of developing countries like Bolivia, Mali and Uruguay.

In Nevada, the Truckee Meadows Water Authority, a nonprofit, community-owned utility, acquired control of its water system in 2001, according to the Reno Gazette-Journal.

The intent was to keep the water supply for three Nevada counties public, but a recent leasing offer from the investment firm Goldman Sachs has divided the water authority’s board of directors.

Some board members see the lease as a business decision that would flood the county governments with an additional $100-160 million — others refuse to consider it.

“It took us a long time to get this into the hands of our citizens,” Councilman Mike Carrigan, chairman of the water board, told the Gazette.

He said rates would go up at least by 15 percent, translating into pure profit for the private company but extra cost for the public.

In the United States, the issue is up for debate at the federal level, with hearings on the Water Restoration Act of 2007 underway in Congress.

If the bipartisan bill passes, it will lead to federal control of all U.S. waters, to better control pollution.

Some, however, fear this will open the door for widespread privatization, which Natural News compared to commercial patenting of genetically engineered food-crop seeds.

In Felton, the public vs. private value of the water system was a sticking point.

California American Water priced the system as a private commodity worth roughly $23 million, while the local water district used a public utility formula to arrive at $7.6 million.

Negotiations out of court saw the final price at $10.5 million, which brought with it an additional $2.9 million in debt.

The company also included 250 acres of watershed land in the deal, which it donated to a local park.

–Julia Hengst/Newsdesk.org

Sources:

“Cal-Am settles over Felton water system”
Press Banner, June 6, 2008

“Pumped up for public water”
Newsdesk.org, July 2, 2008

“Water Is a Human Right”
Reason Magazine, August 17, 2005

“Water Restoration Act May Lead To Privatization of Water Supply”
Natural News, June 19, 2008

“Leasing plan costs TMWA its manager”
Reno Gazette-Journal, July 17, 2008