With an approval from the Public Service Commission last year, Missoula’s water utility, Mountain Water, has been sold to a wholly owned subsidiary of the Carlyle Group. The sale will bring benefits to Mountain Water customers. For example, the Carlyle Group plans to put more capital toward sorely needed infrastructure repairs. However, the benefits afforded to a community that owns its own resources can prove to be more valuable in the long run.
There are a number of studies (e.g. Meyer 1975, Koh et al 1996, Kwoka 2005) comparing the costs of publically and privately owned utilities as well as the quality of the service provided. In smaller cities, towns and villages, there is evidence that a publically owned utility can meet the needs of its populace at lower prices. The Kwoka study finds that public utilities also provide superior quality of distribution.
The other concern about private ownership of a water utility, especially large, corporate ownership, is protection of the resource itself. Decisions regarding the usage and upkeep of Missoula’s water system will be made by groups of officials with no stake in the outcome beyond its profitability. These decisions should be made directly by the people they affect.
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Overall, the Carlyle sale will probably be an improvement on Missoula’s water utility current service due to the capital improvements. However, the sale is far from ideal. I think that this community is more than capable of taking on the responsibility of owning its own utility and I am eager to see it happen. I hope the people of Missoula do not let the momentum for a publically owned utility, generated by the publicity around this sale, fade away. It’s time for Missoula to join the rest of the major cities in Montana and control the distribution of our most precious resource.