1 / 16

Privatization of Utilities

Privatization of Utilities. LWV Privatization Study 2012. A Public Utility is …. A public organization that maintains the infrastructure for a public service, such as for: Electricity Gas Heat Water Waste Disposal Telecommunications. Privatization Is ….

linnea
Download Presentation

Privatization of Utilities

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Privatization of Utilities LWV Privatization Study 2012 LWV North Orange County National Privatization Study 2012

  2. A Public Utility is … A public organization that maintains the infrastructure for a public service, such as for: Electricity Gas Heat Water Waste Disposal Telecommunications LWV North Orange County National Privatization Study 2012

  3. Privatization Is … The process of transferring property from public ownership to private ownership and/or transferring the management of a service or activity from the government to the private sector. LWV North Orange County National Privatization Study 2012

  4. Privatization Strategies • Attrition • Cessation of service • Transfer of assets • Sale of infrastructure • Contracting out • Service provided by private contractor • Deregulation • Elimination of government monopoly LWV North Orange County National Privatization Study 2012

  5. Why Privatize A Public Utility ? • Efficiency • Innovation • Quality • Reduce costs • Less regulation • Raise funds • Increase tax base LWV North Orange County National Privatization Study 2012

  6. Why NOT Privatize ? • Increase cost to consumers • Accountability • Transparency • Corruption • Loss of control • Loss of expertise • Oversight LWV North Orange County National Privatization Study 2012

  7. Government Levels • Foreign • National • State • Local • City • District • County LWV North Orange County National Privatization Study 2012

  8. DoD Utilities Privatization • 1998 – Sec of Defense policy for military departments to privatize installation utilities • 150 Air Force utility systems privatized (March, 2011) • Awarded value of $1.5B • Cost avoidance of $238M LWV North Orange County National Privatization Study 2012

  9. Privatization Can Be A Disaster • The California electricity crisis • 1998 –partial divestiture of electricity generation stations • 2000 – wholesale price of electricity deregulated – not retail prices (CPUC) • Higher demand, less supply led to rolling blackouts LWV North Orange County National Privatization Study 2012

  10. City of Franklin, Ohio • Pilot project for privatization of wastewater plant constructed with federal grant funds. (1994) – EPA approved. • 24 months planning/negotiating process • Fair price for plant, reasonable rates, proper maintenance, transparency, conflict resolution. • 20 year contract with buyback provisions • Rates reduced by 23 % during first year • Future rate increases were limited to increases in the rate of inflation • Pace of economic development increased LWV North Orange County National Privatization Study 2012

  11. Columbia, MO • Argument to privatize water and electric utilities* • Immediate cash infusion • Increase tax base • Reduce municipal employees • Cited Florissant, MO sale of water utility for $14.5M in 2002 • Funds used for public improvements * David Stokes, policy analyst for the Show-Me Institute, a Missouri-based think tank (2010) LWV North Orange County National Privatization Study 2012

  12. Some Rate Comparisons LWV North Orange County National Privatization Study 2012

  13. Near-by Water Rates Source: City of Fullerton LWV North Orange County National Privatization Study 2012

  14. Reverse Privatization (Municipalization) • Felton, CA regained control of water system (2008) • According to a 2002 Century Foundation survey of 245 municipalities, 73 % ended private water contracts because of poor service*. • Some cities op for a public-public partnership (PUP). *Source: Tara Lohan, Water Solutions, the Summer 2010 issue of YES! Magazine. LWV North Orange County National Privatization Study 2012

  15. Guidelines For Utilities Privatization • Determine “there is a problem” • Perform realistic feasibility study • Hire experienced consultant • Include financial and oversight protections in service agreement • Write detailed transition plan • Provide for conflict resolution • Include “outs” (buybacks, etc.) LWV North Orange County National Privatization Study 2012

  16. “Our country must seek a pragmatic balance between social and economic returns.” - Nora Leech (LWVWA), Privatization: The Public Policy Debate LWV North Orange County National Privatization Study 2012

More Related