Morten Lund Writes in the LA Daily Journal: What Water Can Learn from Electric Utilities

San Diego-based partner Morten Lund calls for the privatization of water treatment facilities in an opinion piece published by the Los Angeles Daily Journal. The Southwest United States is currently experiencing a historic drought, with several California counties already declared federal natural disaster areas. In calling for privatization, Lund points to the example of the U.S. electric power industry, which liberalized private ownership rules more than 20 years ago.

Lund describes how virtually all U.S. water treatment facilities are owned by public or semi-public entities like water districts and irrigation districts. He call this arrangement a “horribly inefficient usage of public capital and resources.” By privatizing such facilities, Lund argues that supply and demand will replace a water district’s ability to issue bonds as the limiting factors for building enough treatment facilities to treat all available water.

In calling for privatization, Lund points to the example of the power industry. He argues that “privatization worked for the power generation industry.” The free market leverages the power of capital markets to “minimize cost and maximize efficiency and innovation.” Even more importantly, privatization “can leverage the speed and availability of the capital markets.”

Lund concludes that “privatization will allow us to build more and build faster. Waiting for one-at-a-time municipal politics and bond financings just won’t do. Not now. Not with our water supply.”

“What Water Can Learn from Electric Utilities” was published by the Los Angeles Daily Journal, April 1, 2014. Subscription required.