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