Bill to Privatize Providence Water Raises Objections
Mayor says money needed to pay down pension liability
June 11, 2018
PROVIDENCE — Drawing comparisons to Flint, Mich., and other cities that have suffered from privatizing public water systems, environmentalists oppose the latest legislative effort to monetize the Providence Water Supply Board and its source, the Scituate Reservoir.
The Conservation Law Foundation, The Nature Conservancy, the Rhode Island Land Trust Council and Audubon Society of Rhode Island all raised doubts about changing ownership of the state’s largest public water source. Without protection, the move threatens open-space land buffers and risks polluting the watershed and public drinking water, according to opponents of the idea.
Mayor Jorge Elorza recently made the annual mayoral Statehouse plea to monetize the city’s public water system and real estate worth some $400 million — all to pay down Providence’s unfunded pension liability.
“What is clear, Providence owns a significant asset here,” Elorza said during a May 29 Senate hearing.
But opponents say the bill (S2838) doesn’t prevent the sale of land that buffers the reservoir. The loss of the natural filter system could mean polluted water for the public, like what has happened in Flint, Indianapolis, Pittsburgh and Atlanta.
“The legislation doesn’t contain protection for the land or the watershed,” said Amy Moses, director of Conservation Law Foundation Rhode Island.
Sheila Dormody of The Nature Conservancy suggested that the General Assembly hold off on any decisions until the Rhode Island Water Resources Board releases recommendations from a municipal water study commission.
Otherwise, Dormody liked that the legislation offers the potential to merge operations of drinking water, stormwater and sewage treatment, called integrated water management. In Rhode Island that single entity might be the Narragansett Bay Commission, the largest storm and wastewater treatment operator in the state.
“There are significant opportunities for cost savings but also for more substantial environmental benefits by doing all of those things together,” Dormody said.
Others objected to removing the state Public Utilities Commission from oversight of the transaction and future rate increases.
Sen. Paul Jabour, D-Providence, and other senators expressed favoritism toward the concept. Jabour called the Providence Water Supply Board “one of the few remaining assets that the city has” to pay down the city’s pension shortfall.
Elorza estimated that the $1 billion pension obligation is about 30 percent funded. He insisted that the bill doesn’t privatize the Scituate Reservoir.
“It simply authorizes a transaction,” Elorza said.
Opponents of the legislation fear that ratepayers would be forced to pay the cost Providence received for relinquishing the water system. Elorza noted that the bill capped a rate hike to no more than the total of increases during the past five years.
Elorza insisted that only management of the system would change, not the ownership of land. That management would have public oversight and be run by a fully regulated public utility to assure water quality and rate stability.
“None of this would be happening if Providence were not teetering on the edge of bankruptcy,” Elorza said.
The Senate bill was held for further study. A House bill was heard by the Finance Committee on June 6 and was held for study.
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Monetizing water s a deceptive term for selling Proividence’s water to a private, profit- driven corporation. It assumes water is a commodity to be bought and sold at maximum profit. It totally abandons the civic concept that water is a public good, necessary for individual, family and community life and must be provided to all citizens at a low price.
Abandon the deceptive use of monetize and use the right word, sell.
This scheme is an accounting scheme that focuses only only a current – and never to be repeated – benefit at the cost of future grim consequences. A private water resource owner, as a monetizer in the extraction industry, will act to maximize profits through maximizing prices. This sale alleges that the private company will not be able to raise water prices to Rhode Island residents beyond a certain limit. But nothing prevents the private owner from selling this water to corporate customers such as Nestle. Nestle currently extracts hueg amount of water, even during droughts, in California without any city or the state being paid for this "product." That’s the future of Providence Water just as we are entering a dangerous stage of global warming and climate change when Providence’s water will go to the higher buyer and the citizens of Rhode Island as a result will suffer chronic water shortages and constant pressure to let the water’s corporate owner raise prices to RI citizens as high as the profit-driven owner sees fit.
Elorza is angling for a post mayoralty job at Brown University or Harvard University. These two universities have governing Boards dominating by Wall Street and its profiteers. It is disgraceful for this Mayor to see himself, and the best interests f the people of providence, to these Wall Street interests.
It is time for two citizen actions: a recall drive to remove Elorza from office, and a class action suit against the city of Providence to prevent the irresponsible sale of its water resources to profiteers.