Group Advocates For Investor Owned Water Company

Jan 31, 2018

A group that goes by #ProtectPeoriaWater is speaking out against a public buyout of Illinois American Water.  

The City of Peoria has until November to determine whether it will purchase the water company under terms of the 123-year-old franchise agreement.

Phil O’Connor is a former chairman of the Illinois Commerce Commission and has remained active in regulatory matters. He says often investor-owned waterworks offer more regulatory protections compared to municipally owned utilities. “The commission can actually limit the ability of a local system that is investor-owned from upstreaming money to the parent if in the judgment of the commission capital additions are being shortchanged of there is some financial weakness.”

O’Connor says municipally owned systems are also left open to another set of pressures in rate setting. He says that can lead to inadequate or even excessive pricing if the water system offers cash flow for that might be useful for other purposes.

He says municipally owned water utilities are not always a benefit to taxpayers and customers other ways too. “There probably is some temptation, to defer maintenance and defer capital additions. We’ve seen this in other places. So politics does enter into that.”

O’Connor says in the City of Chicago water rates have roughly doubled over the last six years because of some deferred maintenance.

In addition to O'Connor, the #ProtectPeoriaWater group includes representatives of the Illinois Black Chamber of Commerce, Laborers' Local 165 and the West Central Illinois Building and Construction Trades Council, and Illinois American Water. 

In 2013 the Peoria City Council elected not to consider the purchase. Peoria’s CEO Council is offering the city $400,000 for the due-diligence study to determine if a public buyout is feasible.