In January 2019, In These Times reported that a privately-owned water company, Aqua America, is buying Peoples Gas, the local natural gas company in the Pittsburgh area. In his article, Doug Shields revealed that the business deal, which dates back to October, 2018, is actually part of a plan to privatize Pittsburgh’s water system. Why is a private water company interested in purchasing a local gas company? As Shields, who works with Food & Water Watch, reported, “It’s a roundabout plan to privatize Pittsburgh’s water system by buying up the gas utility that has also been targeting the water system.”
For months, Peoples Gas had been working with the city on a “strategic public-private partnership” intended to replace aging pipelines and to build a massive new water treatment facility, all allegedly without raising rates. However, as Shield reported, details of how the company plans to accomplish all this have been left very vague.
Pittsburgh’s water system has had serious problems for the past few years. Although lead levels in city water had been improving, when the Pittsburgh Water and Sewer Authority (PWSA) conducted new tests at the start of 2018, 43 homes were found to have lead in their water. The cost of replacing old lead pipes worried city officials who had already had to replace 1,341 lead lines by the end of December 2018.
Pittsburgh’s mayor, Bill Peduto, has pledged to keep PWSA in public hands, while also considering the private company’s pitch to acquire the system. Although Aqua America may not be able to buy the system outright, it will likely influence key decisions that affect user rates. “It’s a form of privatization,” Shields wrote, “and one that would leave Pittsburgh residents paying more while having less control over their future.”
The record from other cities shows that, when private companies take over public water systems, services deteriorate, and the bills for upgrades that had promised ultimately come back to citizens in the form of higher rates for years to come.
Pittsburgh’s PWSA had previously partnered with a Paris-based company, Veolia, to provide management services and “cost saving” programs. The results were disastrous. According to a Mother Jones article from 2016, under the terms of its contract with the city, Veolia kept roughly half of every dollar the utility saved under its guidance. Veolia laid off or fired 23 people, including the safety and water quality managers, and the heads of finance and engineering, according to documents obtained through a right-to-know request.
For decades, Pittsburgh had been adding soda ash, a chemical like baking soda, to its water to prevent the pipes from corroding and leaching into the water. However, in 2014 they switched to caustic soda which is cheaper. The same Mother Jones article pointed out that any change typically requires a lengthy testing and authorization process, involving the state’s Department of Environmental Protection, but the DEP was never informed of the change to caustic soda. Tests that same summer found that the city’s lead levels had gone up and exceed federal standards.
According to a Food & Water Watch report from November 2018, one possible alternative to privatization is to do what Baltimore did when it became the first big US city to ban water privatization. Citizens of Baltimore voted for their water system to become a permanent asset of the city. No corporation can take the water and sewer system away from the city.
Establishment media coverage of the situation in Pittsburgh did highlight that a private company wants to purchase the PWSA, but failed to examine the stealthy scheme to purchase Peoples Gas. The Pittsburgh Post-Gazette published the report by the mayor’s blue ribbon panel charged with improving the Pittsburgh Water and Sewer Authority, but the panel’s recommendations did not mention anything about Aqua America wanting to buy Peoples Gas and how that would give them control over pipe replacement and associated costs. The only mainstream coverage that the Baltimore’s rejection of privatization got was from local Baltimore newspapers like the Baltimore Sun.
Doug Shields, “The Stealthy Corporate Scheme to Privatize Pittsburgh’s Water System,” In These Times, January 14, 2019, http://inthesetimes.com/article/21685/pittsburgh-water-system-corporate-privatization-peoples-gas-aqua-america.
Rianna Eckel, “Baltimore Becomes First Big U.S. City to Ban Water Privatization,” Food & Water Watch, November 8, 2018, https://www.foodandwaterwatch.org/news/baltimore-becomes-first-big-us-city-ban-water-privatization.
Student Researcher: Joseph Viso (North Central College)
Faculty Evaluator: Steve Macek (North Central College)