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Water equity: Public ownership can safeguard communities

The COVID-19 pandemic has shown that access to water is a public health necessity, and municipalities that own their utilities are more likely to protect residents and low-income households in particular from water shutoffs, according to a paper forthcoming in Utilities Policy.

The paper is co-authored by George Homsy, associate professor of public administration and director of the Sustainable Communities Program at Binghamton University, and Mildred Warner, professor of city and regional planning at Cornell.

Their research finds that public ownership of water utilities is a key factor in protecting residents from shutoffs, and in meeting environmental and equity goals such as water resource management.

The researchers used data from a nationwide survey in 2015 of 1,897 local governments across the United States.

“What we were curious about was whether public ownership matters. Most cities in the U.S. have publicly owned water utilities,” Warner said. “There’s some debate in the scholarly literature about privatization, some saying that it would cost less, but that has not borne out.”

“We have tended to think about water as a commodity, and you’d see people getting service cut off because they couldn’t pay,” she said. “Now, we can see water as a public good – if my neighbor doesn’t have water, that isn’t good for me, because my neighbor can’t wash her hands. Recognizing water’s public health value has challenged the notion of water as a commodity.”

Because of that, she said, as well as the pandemic placing economic pressure on many households in the last three months, 35 states including New York and more than 400 municipalities across the U.S. have placed moratoriums on water shutoffs according to the Food and Water Watch database. Some cities – including Detroit, where thousands of residents lose their water service every year due to unpaid bills – have restored water to shut-off households.

“We began this research a few years ago, but it has a new timeliness,” Warner said. “When we weren’t in a crisis, only 8% of the cities in our [2015] sample protected their households from shutoffs. Now we see a tripling of that with COVID-19.”

By contrast, many European countries have universal service obligations regarding water “because they recognize there’s a public health value,” she said. “In the U.S., we don’t consider water as a human right; it’s a commodity. We’ve been much more focused on pricing, and less on equity. That’s going to shift.”

The majority of local governments provide water service, but customers can also benefit from the oversight of public utility commissions. “Utilities are natural monopolies and thus need to be regulated,” Warner said. “What is happening now is some public utility commissions are giving attention to environmental and social equity issues. The public interest involves more than just pricing.”

The researchers also set out to determine if publicly owned utilities tend to reflect more public values.

“The result we feel confident in is the publicly owned utility has these broader community values of equity and conservation,” Warner said. “It also gives us some ideas of what characterizes local governments as to water, and protecting citizens as a matter of local policy. What we saw was, the local governments that offered protections from shutoff were more likely to be run by Democrats. Cities that protect consumers from shutoff also care about conservation and have stated equity goals. They balance public values and other objectives.”

Another finding was that “suburban and rural areas are more likely to protect residents from water shutoff,” she said. “One guess might be that cities may be more likely to have their water utilities be a separate corporatized entity, where balancing broader environmental and equity objectives may be more difficult.”

The research was funded in part by a 2014 Foundational Agricultural Economics and Rural Development grant from the U.S. Department of Agriculture’s Agriculture and Food Research Initiative.

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Jeff Tyson