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Drinking water costs lots of dollars

Marketplace Staff Mar 17, 2009

Drinking water costs lots of dollars

Marketplace Staff Mar 17, 2009


Kai Ryssdal: As if we didn’t have enough to worry about already. Today the World Bank said the recession here and abroad is threatening water projects around the world. And it says industrialized countries like the United States haven’t set aside enough stimulus-package money to replace our aging water infrastructure. According to the United Nations that could cost upwards of $200 billion a year. None of which is lost on towns and cities in this country where drinking water is getting more and more expensive. And some say the private sector is helping to push those prices up. From New Hampshire Public Radio, Elaine Grant reports.

ELAINE GRANT: Locke Lake Colony is a rural development of 900 homes in central New Hampshire. It’s beautiful, but under the surface the community has a lot of problems. The water system is decades old. Some days, says resident Mike Rinaldi, you’d turn on the tap and nothing would come out. So a private water company bought Locke Lake’s system and invested $2.5 million fixing it.

MIKE RINALDI: We now have water. They’re still working on some of the pipes because some of the pipes are dated back to the 1960s.

But now, the company wants to triple Locke Lake’s water rates. That could mean paying an extra $1,000 a year. And Rinaldi says his neighbors can’t afford it.

RINALDI: They’re going to be hit hard, they really, really are. We had two people that were on fixed incomes that when they found out about this tried to put their houses up on the market, but they just can’t sell it.

More and more people are struggling to pay high water bills. Today, 14 percent of Americans get their water from for-profit companies. And many are hiking their rates. Private utilities argue they’re investing in projects like new wells and pipes. Critics say these businesses are just trying to maximize profits. Most states set a cap on how much profit these utilities can make — typically 10 percent. And it’s rare for companies to make less than that. Jon Keesecker is a researcher with Food and Water Watch.

JON Keesecker: In California, Illinois, Wisconsin and New York, households receiving water from a private water company paid on average 13 to 50 percent more than households receiving water from a public-water utility.

Industry lobbyists say their prices may look higher, but that’s because when a city provides water, some of the cost is paid for with local taxes. But when a commercial water company fixes a system, customers bear the full expense. And that’s hard on small communities.

PETER Cook: Small system problems is the Achilles heel of the water business in the United States.

That’s Peter Cook, executive director of the National Association of Water Companies. He argues that private utilities are more efficient, especially in larger towns and cities. But most of the systems that private companies run are small rural ones.

COOK: Many of them, if not most of them, all are troubled because of the small economies of scale and the fact that their populations probably aren’t big-wage earners and have limited funds.

No matter the price, Jon Keesecker of Food and Water Watch argues that selling water for profit is a bad idea.

KEESECKER: I think when folks see water being privatized, they see a price being put on something that’s essential.

And it’s becoming more and more essential to fix this country’s aging and leaky plumbing. The federal stimulus package includes more than eight billion dollars for drinking and wastewater-treatment projects. That money should begin to flow soon. Then the big question will be, will it help ease the pain at the tap?

From Barnstead, New Hampshire, I’m Elaine Grant for Marketplace.

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