Rezin against bill favoring private water company monopoly
Sen. Sue Rezin (R-Morris) did not like the idea of a privately owned water company monopoly.
At the May 9 Senate Executive Committee hearing, Rezin questioned officials at length over HB4508, sponsored by Sen. James Clayborne (D-Belleville) and Rep. Nick Sauer (R-Lake Barrington), which would allow for a 10-year sunset for the expansion of privately owned water companies.
Before Rezin expressed her concerns, Citizens Utility Board Director (CUB) Brian McDaniel testified that CUB is opposed to HB4508 for a few reasons.
“This bill is about water privatization,” McDaniel said of Aqua and Illinois American Water’s desire to purchase municipally owned systems.
He said both companies will not spend a dime to develop the systems since it will fall on the existing ratepayers.
Water is the oil of the next century, according to McDaniel, who said bills like HB4508 is how major water companies like Aqua and Illinois American Water make money. “A significant check on these company’s expansion is being removed,” McDaniel said.
Rezin wasted no time asking Illinois American Water Director of Government Affairs Matt Glavin why his company and Aqua should have a monopoly on the purchase of water systems.
Glavin said letting a privately owned water company acquire a system larger than itself does not accomplish the goal of offering economies of scale.
Then what about a small company that wants to grow into a large company, Rezin asked. “You're basically saying they cannot participate in this bill that you are trying to pass.”
“Yes, as the bill is written,” Glavin said.
Rezin asked how American Water would protect consumers from rising rates, and Glavin said the bill caps cost at 2.5 percent on a single acquisition.
What if there are multiple acquisition at the same time, Rezin asked.
After Glavin confirmed it could be high as 5 percent if there is more than one acquisition, Rezin wanted to know the cap for new customers.
None, according to Glavin. However privately owned water company rates are consistent, he added.
“Municipal rates vary greatly across the state,” Glavin said, adding the bill is not a mandate rather an option for municipalities who choose to utilize it.
Rezin said she had a problem with the companies using fair market value rather than the deprecated value to buy a system that will be eventually be transferred to the rate payers. That was when Rezin had an idea of her own, asking Glavin why lawmakers should not let citizens decide by voter referendum to assure more consumer protection.
“I am not prepared to testify outside the contents of this bill, but I would be happy to talk to you about that,” Glavin said.
Rezin said she and other lawmakers were caught a bit off guard when the bill was moved to the Senate Executive Committee without a heads up and she wanted to more answers before voting no on the bill.
HB4508 passed through committee on a 10-3 vote and was approved by the Senate on Thursday.