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West Virginia's State Attorney General's office is trying to stop the sale of West
Virginia-American Water to a foreign company. The West Virginia Public Service
Commission has already approved the transaction.
The Charleston Gazette
State Tries To Stop Water Company Sale
By Tara Tuckwiller
Staff Writer
Thames Water should not be allowed to buy
West Virginia-American Water until state
regulators slow down and thoroughly
investigate some important matters that
never came to light during public hearings,
the state attorney general's office says.
On Monday, Senior Deputy Attorney
General Silas Taylor petitioned the Public
Service Commission to vacate its Oct. 23
order that permits the sale. The PSC should
hear new evidence, and the attorney
general's office wants to intervene, Taylor
said.
The PSC will "review the motion and
discuss a response on it," said public
information specialist Bob Teets.
Rather than a "careful and deliberate"
consideration of whether 25 percent of West Virginians should get
their water from a German megacorporation â Thames' parent
corporation RWE â Taylor wrote that "the proposal has instead
been placed on fast-track by state regulators."
"The enormous profit to American Water stockholders creates
tremendous pressure to consummate the deal as quickly as
possible to prevent a loss of $1.6 billion in stockholder wealth."
That $1.6 billion comes from the high price Thames is willing to
pay for American Water â $16 per share more than it is worth.
Thames will recoup that cost, Taylor wrote, partly by getting
involved in West Virginia sewage. Thames promotes its expertise
and experience with sewage, but it has a questionable
environmental record with sewage in England, Taylor wrote.
Although American Water's environmental regulations were
disclosed at length to the PSC, "At no point in the [PSC]
proceedings did RWE or Thames Water disclose that the
experience and expertise of Thames Water Plc included such a
questionable history of environmental violations. ...
"Now that the facts have been revealed, it is imperative that the
proceedings be reopened so that the commission may consider
their impact on the public interest."
Thames has now announced it will create a new subsidiary to hold
its U.S. companies. That's in addition to the current corporate
pyramid: West Virginia-American, American Water, Thames
Holdings and RWE.
In addition to West Virginia-American, "the remaining companies
are simply holding companies â companies which have no
purpose other than to acquire and hold stock and to manipulate
the activities of the various companies they own for the sole
purpose of generating profits for the stockholders of RWE."
West Virginia-American built its network with lots of help from
public grants and loans, Taylor pointed out.
That "would not have been tolerated but for the extensive control
exercised by the public over WV Water" through the Public
Service Commission, he wrote.
He said that control can be seriously undermined by a foreign
takeover in three ways "that received little or no attention during
the commission hearings":
International trade agreements, such as GATT and NAFTA,
under which foreign corporations can appeal to a World Trade
Organization dispute panel if they think local regulation is
unnecessary, "effectively making this commission's regulatory
control reviewable by an international tribunal."
If the PSC tried to stop Thames from selling West Virginia's
water to foreign countries, Thames could sue the state. "Similar
claims have already been filed against Canada and Bolivia, after
both governments backed off of water privatization agreements
following public outcry."
A California company is suing British Columbia for $10 billion
after it banned water exports. An American corporation is suing
Bolivia for scrapping a private-water deal that forced people to
"get special permits just to collect rainwater in roof tanks, even
though water bills were a third of average wages."
RWE "will be engaged in substantial unregulated activities, such
as coal mining and energy trading ... Should one of the
unregulated aspects of RWE suffer economic disaster, to what
extent will American Water, including WV Water, be adversely
affected?
"Will earnings that would otherwise have been retained to improve
and expand West Virginia's water infrastructure be diverted to
stockholder dividends or used to subsidize RWE's losing
ventures? ... Will the water held by RWE in trust for West
Virginia citizens be held hostage to a world economy turned sour?
"Water is basic. It is a necessity of life. Should West Virginia risk
losing control over its water?"
Taylor pointed out that the Oct. 23 order isn't final, because
Thames and West Virginia-American haven't filed some necessary
modifications to the deal. Even if it were final, it wasn't in effect
when Taylor filed his petition.
This would be the first time a foreign company buys an American
water system. Other foreign companies have gotten contracts to
manage American water systems. Taylor wrote, "Many large
municipalities such as Atlanta and Milwaukee are unhappy with
the results and are considering contract termination.
"That will not be an option for WV Water and the other
waterworks already acquired by American Water, the seller in this
controversial transaction." | 
