NOTE: This op-ed originally appeared in the Pittsburgh Tribune-Review.
Pennsylvania faces a pivotal moment in securing clean, safe and reliable drinking water and wastewater services. Communities across our commonwealth contain pipes that have far outlived their normal service life. Many still contain lead, a known hazard, especially for children. And while many local governments have done a fine job managing their hometown systems, many have deferred maintenance to the point that water service is in jeopardy.
A new independent study by Charles River Associates sheds light on the transformative potential of privatization and consolidation of Pennsylvania’s water systems. The findings show that experienced, well-resourced private and consolidated water companies offer clear economic, consumer and environmental benefits that could positively impact Pennsylvania communities.
Private and consolidated water companies in Pennsylvania are not just water and wastewater service providers; they are economic engines, supporting over 13,000 jobs, injecting more than $1 billion annually into the commonwealth and contributing $281 million in taxes each year. The economic stimulation of private sector control has a cascading effect, transforming local communities and bolstering financial stability.
Most importantly, water quality matters. The report indicates that private and consolidated water companies stand out compared to other types of water systems when it comes to drinking water quality. Keeping harmful chemicals and other contaminants from ever reaching your home is critical, and this study indicates that private and consolidated water companies are thriving in this area.
Wastewater system privatization and consolidation is also shown to reduce the amount of wastewater, or sewage, dumped into Pennsylvania’s rivers and streams. The study found that private and consolidated water companies consistently had a lower rate of federal wastewater regulation violations compared to other wastewater systems. This illustrates the importance of timely water infrastructure maintenance and investment.
The U.S. Environmental Protection Agency estimates that we’ll need to invest more than $744 billion in our water infrastructure over the next 20 years to meet federal water quality and safety standards. According to the EPA, “the water and wastewater industries are the most capital-intensive of utility services provided to the public” and are therefore best suited to address these concerns.
Some publicly owned and operated entities and authorities can grapple with budgetary constraints and struggle to harness the capital necessary to invest in ensuring healthy and environmentally safe water infrastructure. Pennsylvania’s Act 12 of 2016 serves as a lifeline for these communities. By granting an option to sell municipal water and wastewater systems, the law allows municipalities to inject much-needed capital into their budgets to address essential issues such as public safety and infrastructure. Act 12 encourages private sector investment, fosters more efficient and technologically advanced water and wastewater systems, enhances operational efficiency, and provides improved service to consumers, and empowers local decision-making.
Thanks to resources such as economies of scale, private and consolidated water utilities are more equipped to make these needed investments and to introduce cutting-edge technologies and best management practices. This stimulates healthy competition and encourages continuous improvement in service delivery and infrastructure investments. They also are better positioned to protect against cyber terrorism, which recently struck a western Pennsylvania water system.
Pennsylvania stands to gain immeasurably from embracing privatization and consolidation as a progressive approach to water and wastewater management. Support for the commonwealth’s water privatization and consolidation policies is imperative to empowering elected officials to make decisions that serve the best interests of their communities, especially when it comes to critical water and wastewater infrastructure. Pennsylvania must lead the charge in revitalizing its water and wastewater infrastructure in order to ensure a sustainable and resilient future. The collaborative efforts of regulators, policymakers, water consumers and companies are critical to overcoming the challenges that lie ahead.
Luke Bernstein is president and CEO of the Pennsylvania Chamber of Business and Industry.