Controversial law easing privatization of water systems hits a snag

By Ted Gregory, Chicago Tribune. November 15, 2018

The controversial effort to make it easier for private companies to take over public water systems, which Gov. Bruce Rauner signed into law about three months ago, was thrown into doubt on Thursday.

It came down to a missed deadline.

In August, Rauner signed an amendment extending a 2013 law that allows private companies such as Illinois American Water and Aqua Illinois to buy water utilities and spread the costs across their existing ratepayers. The amendment to the Illinois Water Systems Viability Act removed a limit on the size of water systems that private companies can buy and extended the act for another 10 years.

But the original act’s expiration date was June 1 of this year, two months before Rauner signed the amendment. That missed deadline led supporters back to the floor of the statehouse on Thursday to change the date of the law’s expiration to Aug. 9.

When several legislators critical of the law and the amendments spoke against both, the bill was pulled. It may be called again in the legislature’s second veto session later this month in Springfield. If the issue remains unsettled after that, it might have to make its way through a new governor and lawmakers.

Originally pitched as an option for municipalities struggling with the high costs of maintaining water systems, the act drew criticism over fears that a private entity controls a basic human necessity. Rates sometimes rise significantly when a private company takes over a public system. Also, residents lament that they have no recourse.

“It seems like every time the bill comes up, more people are speaking out against it,” said state Rep. John Connor, a Joliet Democrat who was among those opposing it on Thursday. About 23,000 of his constituents are Illinois American Water customers and many say they oppose giving more power to the private water company, Connor said.

Illinois American Water spokesman Terry Mackin said the legislature’s intent was to extend and expand the original act.

“Utilizing this program is entirely a community’s choice,” Mackin said in an email Thursday. “A community’s leaders decide whether it wants to sell its water or wastewater assets to a private company.”

The legislation limits rate increases to 2.5 percent per acquisition of a water system, Mackin added. A total of seven Illinois communities have sold their water systems to a private water company since the 2013 law, he said, adding that rates dropped in three communities and were unchanged in another.

“It saved one small town’s (Ransom) residents from being provided heavily contaminated drinking water,” Mackin said.

State Rep. Margo McDermed, a Frankfort Republican who also is critical of the act, said she believes all sides will reach an agreement on the legislation. That agreement, she said, might include a requirement calling for a referendum before a community sells its water system.

“Complying with all the environmental laws is a lot for many municipalities to take on,” she said. “And, it’s expensive” to maintain a water system. “Outsourcing might be the right solution. But let’s all understand the consequences of that decision.”

Read the full Chicago Tribune story here.