Smaller Monopolies

In prior posts, I have said that I favor neither private nor public provision of water, since malfeasance can happen in both cases.

Public water providers can shirk in their duties (leaving the office early, etc.), spend too much (gold plating), and/or underinvest in maintenance (often with the approval or under pressure from their political overseers).

Private water producers can inflate capital expenses to increase their ROI, cut back "too far" on staff or maintenance, and cherry pick for the most-profitable customers.

Of course, public providers may also misbehave as private providers do -- and vice-versa.

The solution, in both cases, is more and better community oversight. Such oversight (monitoring in principal-agent lingo) is easier when water systems are smaller, i.e., they are constructed at the community level.

What this means is that we should construct water supply and sewage services in smaller chunks [Read this and this & this, respectively]. LADWP-sized utilities are too big to understand, monitor, regulate or punish.

Bottom Line: Water monopolies will serve the community when the community controls them.