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Organic Consumers Association

Beware the Water Cowboys

The history of the West is peppered with water cowboys. Just recall William Mulholland, whose role in Los Angeles' secret grab of water from Owens Valley, Calif., was made famous in the movie Chinatown, or Colorado's contemporary water baron, Aaron Million, who's pushing a $3 billion, privately funded scheme to funnel water to Colorado's Front Range. Experience has shown that with water comes power.

The unique properties of water -- the fact that it is a limited resource required for survival and that it has no substitute -- have made it a bitterly fought-over asset in the arid West. Westerners who want to protect their limited water supply realize how important it is to keep this public resource out of the hands of the water cowboys.

But a threat different from diversion has come to town. As communities struggle to balance their ever-shrinking budgets, investment firms and large, predominantly foreign companies are seizing the moment. Across the country, communities are being aggressively courted to sell or lease their drinking water and wastewater utilities to private companies. Since 1991, water utilities interested in profit have seduced at least 144 cities and towns into privatizing their domestic water systems. Most were in the nation's Rust Belt. But this year, a record number of communities are considering it, including some in the West: Tulsa, Okla., Fresno County and Rialto, Calif., and Comal County, Texas, are all considering privatization.

But before they answer the siren call of private water companies, Western cities should heed the experiences of other communities. Because after the jolt of cash that comes when a city leases or sells its water utility, benefits drop off -- sometimes precipitously. In the 10 largest cities around the country that have sold or leased their water systems, companies have raised consumers' water rates by an average of 15 percent a year. Residents of Fairbanks, Alaska, saw their water and sewer bills jump from $543 a year before the utilities were sold in 1997, to $1,197 today, an increase of 9 percent annually. Residents of East Palo Alto, Calif., have seen their bills rise by 10 percent a year since their water system was leased to the for-profit company, American Water.


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