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About Street roots. (Portland, OR) 1998-current | View Entire Issue (Aug. 10, 2018)
Page 4 News Street Roots • Aug. 10-16 2018 JBOÇK BY EM ILY GREEN “Now that they have this private utility,” said Grant, “they’re also looking to buy up ince NW Natural announced its expansion municipal systems.” When cities are strapped for cash, or when into the water utility sector this past their water infrastructure is ih need of major December, the company has begun repairs, an offer from a private company buying small water companies in Oregon, Idaho and Washington through a holding company it’s looking to buy their water utility can look very attractive. But most often, said Grant, created. companies will target cities that have budget Unlike NW Natural, which is investor-owned, deficits unrelated to their water systems and the majority of Oregon’s water systems are offer them large sums of upfront money to government-run utilities, serving more than 95 entice them into selling. percent of Oregonians. The largest private “We see that most sales of water systems water company in Oregon serves just 13,000 aren’t related to the actual system,” she said, customers in Bend. “but related to the financial condition of the The absence of big water in the region _ city itself.” means there’s not much competition as NW NW Natural told Street Roots it’s not ready Natural moves into the sector - although it’s to discuss its water utility plans, but called its not the only large company to do so recently. Last year, California’s Southwest Water acquisition of Salmon Valley Water Company in Welches, Ore., and Falls Water Company in Company, which operates in six states, purchased Oregon’s Cline Butte utility near Idaho Falls, Idaho, “the first step in a broader Redmond and Mountain Lakes water company strategy,” when it announced the move in near Klamath Falls. December. “This is the third case I’ve heard of, so far “The water utility sector has a risk profile this year, of a gas company seeking to expand and business model that is similar to our core into the water sector,” said Food and Water gas utility,” read the company’s statement at Watch’s Mary Grant She oversees the that time. “There are also substantial advocacy group’s national Public Water for All investment opportunities over the long term, campaign. as water infrastructure needs to be replaced While the utilities NW Natural is attempting and upgraded to serve growing communities to acquire are already private, Grant said the with safe, clean drinking water.” gas company could be positioning itself to Because the water utilities NW Natural is purchase municipal water systems as it purchasing at this stage are already private, continues to expand. local ratepayer watchdog group, Oregon That’s what a Northeast gas company, Citizens Utility Board, or CUB, isn’t waving Eversource, did after it moved into the water any red flags. sector last year with the purchase of Aquarion There’s a need to phase out natural gas, so Water Co., a private company that operates in companies such as NW Natural will be looking Connecticut, Massachusetts and New for ways to diversify, said Bob Jenks, CUB’s Hampshire. executive director. S E N IO R STAFF W R IT E R I Moving into water makes sense for gas companies, which already have established relationships with the state regulatory agencies that oversee utilities, and already know the business of delivering those types of services. “If they were buying public utilities, we’d view it differently,” Jenks said. His colleague, CUB Advocacy Director Janice "This Is the th ird case i w Thompson agrees. Thompson said if private Beard of, so far this year, ' companies were buying- @1 a gas cempany seefelag up municipal-run water to erpasid Into the water utilities, that would be a sector«" “more problematic trend” - M ARY CRASr FO O D A N D W ATER W A T O because major public assets would be lost to the private sector. “Subsequent private company management doesn’t always deliver on promised cost savings because the financing of frequently-needed infrastructure improvements can be more expensive for private compared to public utilities,” Thompson said in an email. Private companies have costs that public companies do not, such as income taxes and property taxes, and they don’t have access to municipal bonds and federal grants. All those extra costs are passed along to ratepayers. A key finding of a 2016 Food and Water Watch report, “The State of Public Water in the United States,” found that on average, private companies charged 59 percent more than local governments for drinking water. In Pennsylvania, where water company lobbyists have spent more than $1 million at the state level over the past decade, private See WATER, page 5
