Guest Commentary Shines Favorable Light on Private Water Utilities

Posted on May 13, 2013

Guest Commentary Shines Favorable Light on Private Water Utilities

In an April edition of the Sierra Star, Lynn Sutton submitted a guest commentary calling for “a much more thorough investigation into the benefits of hiring a private company to maintain the county’s various utility systems.” Sutton, a retired civil engineer living in Stockton, responded to an article by reporter Carmen George about a public meeting that was held to explore selling Madera County’s 34 sewer and water districts to private companies.

In response to several opinions expressed in George’s article, Sutton commented on what he believed to be “misinformation going around regarding the issue of private water companies.” Sutton stated, “My opinion of them has been quite good. They hire very competent people to run the facilities as efficiently as possible. They provide this service at a very competitive cost when compared to similar services provided by publicly owned utilities.”

Addressing a comment in George’s article about profits made by American Water Company, which proposed buying Madera County’s water system last year, Sutton contended, “For such a large company, I feel the profit they earned is not out of line. The real question that should be asked is… did the company provide a competitive service for its customers? I’m sure the answer is ‘yes.’ The company would not be in business if they did not provide good service.”

Sutton continued, “Just because private utility companies are in business to make a profit for their stockholders does not mean that they automatically do not provide a cost-effective service to their utility customers.” Quite the opposite is true.

Pointing out that all private utility companies in the state are regulated by the California Public Utilities Commission (CPUC), Sutton explained that the CPUC must approve all rate increases and utilities are required to submit detailed applications to the CPUC to justify the requested increases. “Often times,” noted Sutton, “the reason for the request is to cover the cost of complying with new federal clean water regulations.”