Privatization is an issue in water policy that I follow with some interest, and occasional amusement at the overheated rhetoric on both sides. Prop 16on California’s June 8 ballot, has made me wonder at the way we talk about and think about water and energy so differently. The fact is that today, most Americans pay government utilities for water, but buy power from private, for-profit companies.
Today, 89 percent of Americans have water delivered to our homes by a public water utility, essentially a branch of local or regional government. The other 11 percent of us buy water from a private company. With gas and electric, it’s the other way around: only 15 percent of us buy energy from public utilities, while the other 85 percent pay private, for-profit companies.
In the water world, there is strident opposition to privatization, from activists like Maude Barlow and organizations like Food & Water Watch. The argument goes like this: private companies value profit over all else, and can’t be trusted with something so essential to our life and well-being.
But water and power are both essential to life in America. You realize this very quickly if you live in a cold climate and forget to pay your heating bill. Yet we seem comfortable with private ownership and operation of our power grid and gas pipelines? Why the disparity in the way we think about water and energy?
I am agnostic on the issue of public vs. private utilities. Like most people, I want clean water, reliable energy, and reasonable rates. The management and administration of the pipes, power lines, and billing systems can be handled by government or companies. If government screws up, we vote the bums out of office. Likewise, private utilities are accountable to regulators at state Public Utilities Commissions.

This debate over public vs. private energy has taken center stage with Pacific Gas &Electric’s ill-advised California ballot initiative Prop 16. So far, PG&E has funneled $46 million into the June 8 ballot “New Two-Thirds Requirement for Local Public Electricity Providers Act.” I think Prop 16 is a terrible idea, hope it fails, and wonder why allowing this on the ballot was actually legal.
Why on earth should local government need a 2/3 vote to engage in the business of providing services to its citizens? Imagine if local governments had to hold a special election for every decision. Want to build a new municipal pool? Sorry, have to put it to the voters first.
It shouldn’t require the same super-majority as amending the state constitution. We’ve seen what a 2/3 voter requirement did with 1978’s Prop 13: among the 50 states, California has the highest per-capita GDP, but the third-lowest spending per person.
I called the ballot initiative ill-advised above, because it stands to seriously tarnish PG&E’s otherwise good reputation. I would advise them to consider the backlash from this brazen attempt to perpetuate its monopoly.
I generally had a good impression of the company before this. As a customer, I’ve never had any troubles; the power stays on 24 hours a day, and my bills are really cheap compared to other places I’ve lived. The company has a good recent record on the environment, having invested in renewables like wind and solar, and supported California’s climate legislation.
But their spending on Prop 16 has caused me to completely change my view. Before, I may have been hesitant to support my local government getting into the power business. After all, it is a complicated, capital-intensive, and risky. But that’s all changed. When a corporation wastes ratepayer money and manipulates public opinion to further its own interests, you have to conclude that they have become a “bad actor” and are no longer serving your interests.