Comments on: Reader Op-Ed: Private Investments

By: Jason

Jason — Sat, 12 Feb 2011 16:03:41 +0000

There shouldn’t be any disagreement over the need. There is really no disagreement over the solution. But there is disagreement over how to pay for it. “$180 billion in private capital waiting”…at what cost? Communities may not have a choice soon but to go the route of private equity, but simply increasing their own rates is a cheaper solution for most.

For those who think that private equity is a panacea for funding this infrastructure problem, they should think again. There is no free ride. Utility customers will pay more.

By: Tweets that mention Reader Op-Ed: Private Investments | WaterWideWeb.org -- Topsy.com

Fri, 11 Feb 2011 18:16:56 +0000

[...] This post was mentioned on Twitter by waterwideweb.org, waterwideweb.org. waterwideweb.org said: Reader #OpEd: #Privateinvestment in #water #infrastructure. Reader comments on interview w/ @WaterIsYourBiz http://bit.ly/hsROhp [...]

By: Bill

Bill — Fri, 11 Feb 2011 17:12:46 +0000

I agree that water pipes are not high on the priority list and that; “Most communities aren’t going to raise utility rates so that they can deal with infrastructure issues.” Pipes aren’t sexy!

Waterisyourbusiness.org is taking a proactive approach to raise awareness and build political support and pressure for these investments so that communities don’t have to wait for a disruptive pipe break to spur investment.

Check out our national map of all of the pipe breaks over the last month: its a problem. There is over $180 billion in private capital waiting on the sidelines to solve it.

By: What the Private Equity Debate Unfold at WaterWideWeb.Org | Stepwise Utility Advisors

Fri, 11 Feb 2011 16:39:50 +0000

[...] gave an interview to writers at Waterwideweb.org. The resulting article is worth a good read, as are the comments. Share and [...]

By: Jason

Jason — Fri, 11 Feb 2011 16:36:45 +0000

“Utilities could access cheap debt while using private capital to rebuild their infrastructure.”

It’s not the tax-exempt debt that’s the issue with respect to private equity, it’s that the private equity will demand a return that is much higher than the return required for the debt. More private equity means higher costs of capital, and that means higher rates all else being equal. Still, what I also said in my interview was that private equity isn’t necessarily a bad thing (it may be totally necessary in some cases) it’s just that end users don’t understand what the implications are for their utility bills yet. The simple and accurate answer is: rates are not going to go DOWN as a result of private equity investments. It’s not a panacea of cheap money. In fact, quite the opposite.

By: EMBER

EMBER — Fri, 11 Feb 2011 01:58:13 +0000

Re: “Private equity might be a good thing in some ways, but our utilities have access to the cheapest capital in the world, after factoring in the tax exempt nature of the debt.”

A simple change in law would allow all public water projects access to tax-exempt debt, regardless of who is paying. Utilities could access cheap debt while using private capital to rebuild their infrastructure.

By: Monex

Monex — Thu, 10 Feb 2011 22:23:08 +0000

Water pipes were not high on the priority list..Before the war water pipes were usually over-engineered. The average useful life of water pipe from the 1920s is over 100 years. We re feeling the effects of this today..More than 56 percent of all water breaks today occur in pipes built in the 20 years immediately after World War II.