By Bonner Cohen, Ph.D.
Adjunct Scholar, The James Madison Institute
Read the full Policy Brief: “Florida’s Underground Water Infrastructure: Pathways to a More Secure Future”
Policy Brief Highlights:
A crisis is plaguing underground water and wastewater systems at a time when the federal government is increasingly unable to provide state and local governments with financial aid for this kind of infrastructure, as was common in the past.
Investor-owned utilities, with their ability to raise funds from capital markets and apply their business acumen to complex logistical undertakings, have been — and continue to be — well positioned to provide water and wastewater services.
The compliance record of the major companies in the private water utility sector has far surpassed that of most municipal utilities and smaller water companies. This was particularly true concerning compliance with the health standards for drinking water.
Spearheading the effort to drive private water utilities out of Florida were two related activist groups: Food and Water Watch and FLOW Florida. These groups have made no secret of their hostility to privately owned water systems.
One of the major private utilities operating in the state, Aqua Utilities Florida, appears to have underestimated the costs of upgrading the decaying water networks it had acquired. When those costs were passed on to customers, it caused a backlash that was exploited by the activist groups.
Allowing targeted tax credits for investor- owned utilities that upgrade their water and wastewater networks would lessen the burden being passed along to their customers.
To increase the cost-efficiency of these systems, the state should review outdated regulations that tend to preclude both public and private water utilities from using new products and from taking advantage of recent technological advances in this field.
To meet the state’s future needs and upgrade decaying systems, Florida needs to create a neutral regulatory environment based on cost-benefit analyses in which the ownership of the utilities providing water and wastewater services — whether it be a government entity or a private firm — is less important than the quality and value of the services provided.
For more information contact Valerie Wickboldt at 850.386.3131 or vwickboldt@jamesmadison.org.
