NAWC-PAC 2002 Election Results - December 2002

NAWC is pleased to report that the NAWC-PAC had a very good election season. In fact, fully 97% of those candidates the NAWC-PAC supported won their elections in November. While we often have winning percentages over 90, this is a new record for us. Below is a list of those candidates we supported, and how they did.

NAWC-PAC 2002 Election Results

House Results
Election cycle: 2001-2002

Senate Results
Election cycle: 1997-2002

[Back to Top]   

NAWC Reports on Hartwell Decision — April 2002

On February 4, 2002 the California Supreme Court issued its long-awaited decision in Hartwell v. Superior Court of Ventura County, actually a group of several cases consolidated for Supreme Court review of certain pretrial motions. Essentially, the Court held that compliance with national and State drinking water standards is a complete defense in tort lawsuits against companies regulated by the California PUC.

Left unstated is which entity (judge, jury, State primacy agency) makes that factual determination. Also the Court did not directly address the issue of unregulated contaminants. Preemption of lawsuits was not extended by the Court to cases against utilities and agencies not regulated by the California PUC.

Copies of the decision may be obtained from Cade Clark.

[Back to Top]   

NAWC Reports on New GAO Study — February 2002

In a November 2001, report to Congress, the Government Accounting Office has estimated that Federal and State governments provided an average of nearly $7 billion annually in assistance for water infrastructure improvements from 1991 through 2000. According to the report, "nine Federal agencies made available about $44 billion, in a variety of forms, for drinking water and wastewater capital improvements," over the ten-year period. Over $24 billion came from EPA; another $12 billion came from USDA for rural communities. In addition, State governments made a total of about $25 billion available for water infrastructure programs over the same period.

The GAO Report is the product of a request made by Senators Smith (R-NH) and Crapo (R-ID) last year as the Senate Committee on Environment and Public Works (EPW) considered a variety of legislative options for water infrastructure financing. NAWC was an active participant in the Committee's deliberations throughout the year, vigorously opposing the enactment of new government grant programs. Instead, NAWC and the H2O Coalition that it organized have advocated SRF reform, privatization options, direct assistance to needy customers where appropriate, and ultimate self-reliance for all systems.

However, The Water Infrastructure Network (WIN), a coalition of water and wastewater associations advocating an additional $57 billion in Federal funding for water infrastructure over the next five years, still believes the existing level of $6.9 billion per year to be insufficient. In a response to the GAO Report, a spokesman for the Association of Metropolitan Sewerage Agencies (AMSA) stated that, "Another government organization has now come out and acknowledges that the water infrastructure need is enormous."

Staffers for the Senate EPW Committee are expected to produce draft legislation as a result of last year's deliberations early in 2002. A copy of the GAO Report can be obtained by contacting Cade Clark at cade@nawc.com.

[Back to Top]   

NAWC Testifies at Senate EPW Hearing — April 2002

On February 28, Andrew Chapman, President of Elizabethtown Water Company, testified on behalf of the NAWC before a Senate Subcommittee hearing on the recently introduced bill, S. 1961 the Water Investment Act. (See related article.) This hearing was the second and final on this legislation. The first was held on February 26.

The hearings went very well with the NAWC standing out as virtually the only represented organization enthusiastically endorsing the bill, and encouraging its passage without any amendments designed to dilute or omit the existing policy provisions of S. 1961. From the testimony:

The bill "encourages utilities to use creative public-private partnerships, consolidation and other solutions in addressing their infrastructure challenges. The bill will also keep the industry on the path to self-sustainability through rational rate structures and sound asset management practices. The authors of the bill have wisely thought outside the box with an innovative program designed to assist disadvantaged consumers, instead of the entire utility in circumstances where only some of the utility's customers are disadvantaged. Finally, S. 1961 at last puts the customers of privately owned utilities on full and equal footing with those of municipal utilities by extending private utility eligibility to the Clean Water SRF (CW-SRF) and encouraging all States to extend private utility eligibility to both the CW-SRF and Drinking Water SRF (DW-SRF)."

Most of NAWC's sister water associations appeared at the hearings. The Association of Metropolitan Water Agencies continued its push against private utilities and foreign ownership. From their testimony on the bill's requirements that SRF applicants "consider" public-private partnerships:

"Privatization experts have identified some of the issues that need further exploration. Among them are those surrounding accountability and the blurring of roles and responsibilities. For example, who is responsible for complying with environmental regulations, resolving service complaints and planning to meet future needs. Who pays if the private partner fails? If the private partner takes on more liability than it can afford, who's responsible when something goes wrong?

Another issue that has recently emerged is a concern about the implications of international trade agreements on domestic privatization since four of the major companies involved in the U.S. water market are located in other countries. For example, once a municipality contracts with a foreign provider, can that municipality withdraw from the agreement? What impact could the General Agreement on Trade in Services (GATS) and the authority of the World Trade Organization (WTO) have on future contracts?"

The Rural Water Association also took issue with private utilities within their ongoing opposition to consolidation;

"...consolidation and privatization are limited solutions for small systems. Consolidation can work in some situations, but only for a small portion of small systems and only when the systems are in close proximity and the economics make sense. Rural Water is the lead proponent of consolidation when it makes sense (when it results in better service for the consumer) and we have consolidated numerous communities in all the states. Consolidation and regionalization that is in the consumers' best interest will happen naturally at the local level regardless of federal policy on issue. Federal policy that favors consolidation over the locally preferred solution is a step in the wrong direction for consumers (i.e. 42 U.S.C. Sec. 300g-3(h) Consolidation Incentive). Privatization is rarely a less costly solution for very small communities. In the very small communities it is, perhaps, more common to see private systems being transferred to public bodies so they can obtain better financing and local governmental control. The missions of private water and rural water systems are fundamentally different, the reason being the lack of profitability in sparse rural populations."

Rural Water also distinguished itself from all other water associations in opposing access to the SRFs by private water utilities (or 'corporate water' in their parlance). Based on their testimony they apparently not only oppose extending private access in the CW-SRF, but also want to roll back the access private companies have had to the DW-SRF since 1996;

"Corporate water systems should not be eligible for state revolving funding. Taxpayer subsidies should be prohibited from profit generating companies or companies paying profits for shareholders/investors. Private companies argue that they have to comply with the same regulations. However, they voluntarily chose to get into this "business" and compliance is not the over-riding principle that should be considered in this discussion. We believe that the distinction in mission between public and private is the core principal that should be considered. Private systems are in the business to maximize profit. Public water utilities were and are created to provide for public welfare (the reason why public water continues to expand to underserved and non-profitable populations). This is a significant difference. And while we believe that maximizing profit is a noble virtue and as American as safe water, we do not think that taxpayers should help the cause of privately owned systems."

The bill may be "marked-up" (or formally considered in Committee) soon, perhaps early spring.

A copy of NAWC's testimony can be obtained by contacting Cade Clark at cade@nawc.com.

[Back to Top]   

NAWC Testifies on Water Infrastructure — June 2002

On April 11, the Subcommittee on Environment and Hazardous Materials of the House Energy and Commerce Committee held a hearing on water infrastructure financing. Terry Gloriod, President of Illinois-American, represented the NAWC.

Gloriod testified that instead of creating a massive new federal grant program, Congress and the water industry should pursue innovative solutions to financing the nation's water infrastructure challenge. Gloriod urged Congress to work within the Drinking Water State Revolving Fund to achieve that innovation.

Gloriod also told Congress that the size of the infrastructure-funding gap is highly disputed, with different estimates having been made. The much-advertised "gap" of one-half trillion dollars is a worst-case scenario, he added. "It assumes that utilities do nothing on their own to fill it, which of course is a difficult assumption to justify."

Gloriod also called on Congress to remove the state volume caps on private activity bonds, and stressed it would be a better alternative to the inefficiencies inherent in large federal grant programs. Calling the caps "arbitrary", Gloriod said their removal "may be one of the most important modifications that Congress can make to give water suppliers the tools they need to meet their investment requirements."

Ben Grumbles the Deputy Assistant Administrator for Water at the EPA also testified at the hearing, reaffirming the Administration's strong agreement with the principles the NAWC and the H2O Coalition have been advocating for some time. From his testimony:

"Ensuring that our drinking water infrastructure needs are addressed will require a shared commitment on the part of the federal, State and local governments, private business, and consumers.

[Back to Top]   

SAVE THE DATE! 2003 Congressional Fly-In - December 2002

NAWC will be holding its 11th Annual Congressional Fly-In at the Washington Court Hotel, Washington DC, on March 10-12, 2003. Since 1993, hundreds of NAWC company executives have come to Washington, DC during the Fly-In to meet with their elected officials, present issues of concern to the industry and raise the profile of their companies.

This year's Fly-In will be at a crucial time, as water contamination litigation and water infrastructure, security and financing issues are gaining greater attention and scrutiny. Also with the new Congress there will be many new Members to meet, and important new Committee and Subcommittee Chairman to educate. Please mark your calendars to join us.

If you would like to participate in the 2003 NAWC Congressional Fly-in or would like more information about the event, please contact Cade Clark at 202-833-8383 or at cade@nawc.com.

[Back to Top]