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Private water utilities raise consumer bills by $220 million to pay for acquisitions

Over the past eight years, private water utilities Illinois American Water and Aqua Illinois have been buying up aging water and wastewater systems across the state. As of February 2021, these for-profit companies have purchased more than thirty local water and wastewater systems since 2013 and have recovered the acquisition costs—more than $220 million—by raising customer bills.

Ratepayers may be unsatisfied with skyrocketing water bills under new private ownership, but as of now, state law leaves them without a voice in determining if or when their system is privatized.

To right this wrong, CUB is pushing to pass House Bill 737/ Senate Bill 164, which would require communities to hold a referendum before they can sell their water system to a private operator. (Sign the petition here!)

The bill’s senate sponsor, Sen, John Connor, joined CUB and AFSCME for a news conference on Monday to raise awareness of the issue and promote the bill. Watch a recording of the event here and read CUB’s news release.

When faced with the decision to privatize, small municipalities are often stuck navigating the city’s short-term financial solvency, the community’s health and safety and their constituents’ utility bills.

Sell, and the community gets an influx of extra revenue from the sale and a private company takes financial responsibility for a water system that is often in need of expensive upgrades and maintenance. But more often than not, ratepayers end up with higher bills as a result of privatization.

Food & Water Watch did a survey of 500 municipal water systems across the country and found that private water utilities charge an average of 59 percent more for service than their public counterparts. In Illinois, the number is worse. The report found that customers of private systems in Illinois pay almost $300 more per year.

CUB’s consumer advocacy team spoke to a consumer in Glenview, Illinois, which sold its water and wastewater systems to Aqua in 2015. In that acquisition, Aqua agreed to freeze its rates for 5 years. Once the freeze expired in 2020, her bills doubled overnight.

One reason for high private water rates is the IIlinois Water Systems Viability Act. The 2013 law allows private water utilities to raise their existing customers’ rates to cover the costs of buying other water systems. These companies are now free to offer top dollar for aging water systems and stick their existing customers with the cost.

If your city is considering privatizing your water or wastewater system, get the facts first. Tell your state representatives to support Illinois Senate Bill 164 and House bill 737, which would require a referendum of local voters before your municipality can sell its systems.

If ratepayers foot the bill for privatization, they should have a voice in the decision. Tell your legislators your water shouldn’t be handed to private companies without a vote. (Sign the petition here!)