Major Setback for Water Privatizer RWE

The grand promises and soaring ambitions of global water companies to privatize U.S. water systems is hitting up against hard reality — namely, an inability to keep promises to communities while delivering profits to shareholders. Food & Water Watch reports in a just-released report, that the largest water company in the United States, German conglomerate RWE, is throwing in the towel.

RWE purchased the New Jersey-based American Water less than three years ago. Now it’s going to sell off the company. It explained that it learned that water is a “very local business,” and that building a global water empire country-by-country was impractical. All great news.

The Food & Water Watch report describes how community after community got slammed by higher rates and bad service. One community saw rate hikes of 2,000 percent. People got angry at malfunctioning fire hydrants and boil-water notices. Then when citizens or regulators tried to set things right, the company would use political and legal maneuvering to try to get its way. Among the towns that had unhappy experiences with RWE: Lexington, Kentucky; Chattanooga, Tennessee; Felton, California; and Champaign-Urbana, Illinois.

Food and Water Watch writes:

As it turned out, many Americans did not want their local water systems to be owned by a far-off, for-profit corporation. As they learned more about RWE’s true intention — to use the U.S. water market as a profit center — citizens began to embrace the notion of locally owned and operated water services. RWE was just one of several multinational water corporations that ran into a citizenry posing tough questions and backed by popular support.

For any community facing the corporate takeover of the municipal water system, it’s worth checking out The Future of American Water: The Story of RWE and the Politics of Privatization — a cautionary tale about privatization and a vindication of citizen protests.