Indiana Water Privatization Needs Court Approval

The fate of a water utility in Indiana lies in the hands of a court.

Charlestown, IN, chose to sell off its water utility last year to Indiana American Water for $13.4 million, according to The News & Tribune. The state allowed the decision to proceed in March of this year.

But the sale went on hold after the organization No Outsourcing Water (NOW) contested the deal.

“NOW filed an appeal. The city and Indiana American then filed their responses. Attorney David Agnew who represents NOW, said they're just waiting on the Court of Appeals to decide which way to rule,” WDRB reported.

Agnew added: "Any appeal will take a few months for the Court of Appeals to rule on. But when it's technical, it will take a little longer. Less than a year for sure."

Customers are hoping for improvements to their water quality.

“All over Charlestown, you'll find residents fed up with the brown water. A woman posted pictures Sunday of her bathtub filled with dark brown water. Once drained, the water left sediments in her tub,” WDRB reported.

“Some residents said they get brown water once a month, while others said it comes every couple weeks and with no warning. The color in the water comes from Manganese that the city says is safe to drink despite the color,” the report stated.

A major concern about selling the water utility is the prospect of higher rates.

“Rates will more than double. This will affect 2,900 customer's water bills, and it means most will jump by $26 per month,” WDRB reported.

Privatization is a controversial issue in the water industry. Yet there are upsides to privatization, City Lab pointed out.

“Research has shown that privately owned utility companies are more likely to make politically unpopular but critical investments, and that they comply better than public utilities do with federal regulations,” the report stated.

“But, critics of privatization say, they are less sensitive to the circumstances of low-income customers and don’t have an incentive to encourage water conservation,” it continued.

Food & Water Watch, an advocacy group, collected data on rate differences between public and private water.

“Investor owned utilities typically charge 59 percent more for water service than local government utilities. Food & Water Watch compiled the water rates of the 500 largest community water systems in the country and found that private, for-profit companies charged households an average of $501 a year for 60,000 gallons of water — $185 more than what local governments charged for the same amount of water,” the report stated.