American Water President and CEO Jeremy Pelczer: 'Thirst' Does Not Advance Solving Industry Issues

Voorhees, NJ - July 13, 2004

American Water President and CEO Jeremy Pelczer said today the water industry worldwide welcomes and needs to have the views and perspectives from all sectors to effectively meet the needs of the public we serve. An open healthy debate based on facts is more likely to produce sustainable solutions.

Pelczer’s comments are in response to the airing of the documentary “Thirst” on PBS’ Point of View on Tuesday July 13.

“‘Thirst’ reconfirms the importance of clean, safe water in our society. The film rightly highlights the challenge associated with 1.1 billion people without access to safe drinking water and 2.4 billion without access to adequate sanitation. Beyond that, however, it does not contribute to ideas or the solutions needed.” Pelczer said American Water and RWE Thames Water have been working closely for more than a year with a number of international organizations to look at ways to meet the challenge worldwide and targets that have been established to reduce those who lack quality water resources. The organizations share a common commitment to address the problems, and the work is done in a spirit of partnership, listening and learning.

Pelczer took issue with one of the film’s main premises, which is that international companies want to take over global water resources.

“The fact is, only about 5 percent of water and wastewater service worldwide is performed by the private sector, leaving 95 percent performed by the public sector,” said Pelczer. “In America, the percentage of public ownership is smaller, but still a strong majority. This is hardly evidence of private companies ‘taking over’, but it is evidence that public service providers have an important voice.”

Pelczer said the film misrepresents the issue of control of water resources. He made the following remarks on behalf of American Water and RWE Thames Water.

1. Water rights should always remain with the public. We respect that in parts of the United States water rights laws have existed for decades, and allow individual ownership of rights. However, we have no preference for such ownership elsewhere. With more than 100 years experience, and literally thousands of professional water operators and managers, we believe we can offer an excellent service to communities in the United States and outside.

2. Water must be seen as a human right; but the provision of high quality water and wastewater service has a human and economic value. The value of that service must be affordable to the community, needs to be adequately regulated for all interested parties (service, quality, environmental performance, etc.) and reporting against performance standards needs to be transparent.

3. Private sector solutions are options, but, should not be imposed. The really important point is not who delivers the service but the efficiency, quality and cost effectiveness of that service. Many of the challenges facing the water industry in the US, and beyond, will be common whether public or private sector providers are in place. Elected officials are well placed to decide how they can best achieve their aims for their community.

4. With respect to Stockton, CA, which was featured in the film, the partnership between the public and private sector (OMI-Thames Water) reduced the required rate increase by more than 25 percent and projected the City would save $175 million throughout the term of the contract. The partnership combines the extensive experience of OMI, RWE Thames Water and American Water, with excellent, local experienced operators, to help Stockton meet state and federal quality guidelines.

“These are some important issues to discuss and opinions are strongly held and vary significantly,” said Pelczer. “We have gained much as a company already by listening and learning from groups who are passionate about addressing these issues.

“By working together with all stakeholders who care passionately about water, we can solve the challenges – whether about affordability, access, integrated water resource management, the form of regulation, education and also hygiene in some parts of the world, affecting finance and investment to mention a few. Any such solutions critically depend on having agreed facts and a clear understanding of differences to be resolved and not about misrepresentations and traditional prejudices.”

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