Report: Pennsylvania Receives Significant Economic, Consumer, and Environmental Benefits from Water and Wastewater Utility Privatization and Consolidation

December 11, 2023
Independent study finds NAWC-owned systems in Pennsylvania provide cleaner, higher-quality water and wastewater service

PHILADELPHIA – Drinking water and wastewater systems owned and operated by National Association of Water Companies (NAWC) members in Pennsylvania contribute more than $1 billion annually to the Commonwealth’s economy, consistently provide higher-quality water, and have drastically fewer environmental violations than other systems, according to a new study. Conducted by independent global consulting firm Charles River Associates, the study found that NAWC member-owned and operated systems, supported by privatization and consolidation, provided numerous economic, consumer, and environmental benefits for Pennsylvanians. 

“NAWC members are proud to provide clean, reliable, and high-quality drinking water and wastewater services to customers across the Commonwealth,” said NAWC President and CEO Robert F. Powelson. “This report makes clear the benefits that water system privatization and consolidation can provide, and NAWC encourages Pennsylvania lawmakers to support the Commonwealth’s valuation reform policies so local governments can retain the option to make the best decisions for their communities when it comes to updating and maintaining critical water infrastructure.”

“Families, businesses, and communities across Pennsylvania require safe and reliable drinking water and wastewater services for our communities and economy to thrive,” said President and CEO of the Pennsylvania Chamber of Business and Industry Luke Bernstein. “This report makes clear the many positive benefits that experienced, well-resourced water providers bring to local communities and residents when they manage their systems.”

“This study shows that private water utilities have brought expertise, access to capital, and economies of scale to water systems across the Commonwealth while significantly contributing to the state and local economies,” said Jeff Plewes, Principal, Charles River Associates. “We found that state-regulated NAWC-member systems had significantly lower violation rates than other system types and systems that transferred ownership in the past decade showed drastic improvements in violation rates after transfer.”

Key Findings:

  • Economic: NAWC member companies in Pennsylvania support over 13,000 jobs, add over $1 billion annually to the Commonwealth’s economy, and contribute to $281 million in taxes each year.
    • NAWC member companies directly employ over 2,000 Pennsylvanians in well-paying jobs, with average annual compensation of nearly $100,000 including benefits. NAWC member companies’ activities in Pennsylvania support an additional 11,300 jobs.
    • NAWC member companies add over $1 billion annually to Pennsylvania’s economy, with a large portion resulting from capital expenditures. Economic impact is spread across industries including contracting, manufacturing, facilities maintenance, waste management, professional services, and engineering.
    • NAWC member companies contributed to $281 million in federal, state, and local taxes in 2022, including direct taxes paid by companies as well as employee income taxes, sales taxes, and taxes paid by beneficiaries of companies’ expenditures. Of this total tax contribution, $94 million went to state and local taxes, which can be used to fund things like roads, bridges, schools, and emergency services.
  • Consumer: NAWC member companies in Pennsylvania provide much higher-quality drinking water than all other types of water systems.
    • An analysis of Safe Drinking Water Act (SDWA) violations from 2013-2023 shows that NAWC member systems consistently have drastically lower average violation rates than all other types of water systems. 
    • When looking specifically at water quality violations, NAWC member systems’ violation rate ranges from 10 times lower to nearly 100 times lower than other water systems. 
    • Data from the same 10-year period also indicates that water systems purchased by NAWC member companies show greatly improved compliance with SDWA standards after transfer of ownership.
  • Environmental: NAWC member systems in Pennsylvania have a much lower rate of federal wastewater regulation violations than all other types of wastewater systems.
    • An analysis of violations of the Clean Water Act (CWA) from 2013-2023 shows that NAWC member systems consistently have lower average violation rates than systems owned by other entities.

Other benefits of water system privatization and consolidation found in the study include: increased access to capital to invest in infrastructure; economies of scale in expertise, supply chains, and shared infrastructure, which can result in lower, more transparent costs; stringent regulatory oversight; enhanced reliability; and enhanced employee safety.

The report also outlines major challenges facing public water systems across the country, including unsustainable use of water, water quality, and water inequity and affordability. Solving these challenges will require close coordination among regulators, policymakers, water consumers, and drinking water and wastewater companies. 

Read the fact sheet here and the full report here. An infographic is available here.