It is essential to know the facts before deciding to sell a municipal authority or municipally owned water or wastewater system to a private investor-owned utility.

By understanding these facts, you can better grasp the long-term implications of selling an authority or municipal system to a for-profit corporation and make more informed decisions and advocacy efforts regarding your local water or wastewater services.

Rates will increase significantly

When a municipally owned water or wastewater system is sold to a for-profit corporation, rates often increase significantly. This happens because the purchasing company seeks to recover the high acquisition costs and generate profits for shareholders. These costs are passed on to consumers through higher bills. 

This is crucial for consumers to understand as it directly impacts their monthly/quarterly expenses and overall cost of living.

Impact on Consumers - Higher Water/Wastewater Bills: After a sale, rates often increase significantly. For example, some communities in Pennsylvania have seen their bills go up by as much as 166% after privatization.


If your bill was $50 per month, it could increase to $133 per month after privatization due to the need for the private company to recoup the high purchase price and ensure profitability.


One-time cash infusion is not free money

When a municipal water or wastewater system is sold, the municipality receives a large one-time payment from the private company. While this may seem like a financial windfall, it's not free money. The cost of this cash infusion is ultimately paid by consumers through higher rates, and long-term, the higher the rate, the more profit to the private company’s shareholders and higher compensation for their executives.


Locally controlled vs. stockholder driven

When water or wastewater systems are privatized, local control and accountability diminish. Decisions about rates and infrastructure investments are made by the corporation's management, often located outside the local area.

This can make it harder for residents to influence decisions and hold the service providers accountable for issues such as water quality and customer service.


Increased financial burden on low-income households

Rate increases following privatization disproportionately affect low-income households. Higher water or wastewater bills can represent a significant portion of their income, leading to financial strain. This is especially concerning in areas with a high percentage of low-income residents, where affordability and access to essential services like water are critical issues.

Financial Burden on Low-Income Households - Higher water or wastewater rates can disproportionately impact low-income households, making it harder for them to afford essential water services.


A family with limited income might struggle to pay the increased water bills, leading to financial strain and potential service shutoffs if they cannot keep up with payments.

Read more >>>

Know the Facts – Municipal Authority vs. Private Investor-Owned Utility/Company

Combating Privatization of Municipal Authorities – What You and Your Authority Should Do

Testimony of Acting Consumer Advocate, Tonya J. McCloskey, regarding Section 1329 of the Public Utility Code, May 26, 2021