AWWA JAW36124

Municipal water supply systems face little competition and generally cannot go bankrupt, so they lack incentives to operate efficiently. Private systems also face problems: rate regulation removes incentives to innovate, and because private systems pay taxes, they are at a competitive disadvantage. To "level the playing field" in the United States, publicly owned water-supply companies could be transformed into stand-alone, government-owned enterprises subject to the same tax and regulatory policies as private water companies. Both this transitory phase and full privatization would expand a municipality's tax base, encourage full-cost pricing, and lead to less reliance on government financing to upgrade facilities and meet drinking water regulations. Includes 68 references, tables, figures.