The Trump administration wants to sell the Washington Aqueduct, stirring fears among some that the White House’s passion for privatization could mean higher water bills for 1 million residents in the District and Northern Virginia.
But the plan, buried in a few short lines in a budget proposal of more than 1,200 pages, may lead to a different outcome. Some officials in the District want the U.S. Army Corps of Engineers, which operates the aqueduct, instead to turn over the facility to D.C. Water, a public utility.
In that case, water rates would not increase as much because there would be no need to earn a return for investors, according to officials and private analysts.
But there’s a catch: D.C. Water would want to pay the federal government far less than the $119 million than the administration wants from the sale.
The aqueduct proposal is an example of the hurdles facing the Trump administration’s ambitious plan to privatize public assets, such as roads and bridges. The administration would then use proceeds from the sales of the assets to fund new infrastructure projects.
The White House also supports privatization to promote local control and market incentives. It isn’t clear whether Congress will go along with its plans, including for the aqueduct.
The administration’s proposal to “divest” of the facility was barely noticed when the full budget proposal was issued May 23. The Corps of Engineers has run the aqueduct since the conduit began operation during the Civil War.
The network of intakes, pipes and treatment plants carries water from the Potomac River, at Great Falls and Little Falls, to the Dalecarlia, Georgetown and McMillan reservoirs. The water is sold to D.C. Water and other utilities that serve all households in the District and Arlington, and some in Fairfax.
The Washington Aqueduct employs 140 people and is designated as a National Historic Landmark.
Divestiture would not save the federal government money in year-to-year costs, because the aqueduct receives no federal subsidies. Payments by customers cover all its expenses, for both operations and investments.
The administration said divestiture would end the outdated practice of having the Corps of Engineers play a role in supplying drinking water to civilians.
“Ownership of local water supply is best carried out by state or local government or the private sector, where there are appropriate market and regulatory incentives,” Douglas W. Lamont, a senior official in the office of the Secretary of the Army, said in May 24 testimony to a House Appropriations subcommittee.
“The proposal to eliminate the Corps’ role . . . would encourage a more efficient allocation of economic resources and mitigate risk to taxpayers,” he said.
But officials in the District and Arlington expressed concern that a private operator would jack up water rates to maximize profits.
“The best guess we have is that any transfer to a private, for-profit entity is likely to mean cost increases for customers,” said Arlington County Board Chairman Jay Fisette (D).
He expressed bewilderment that the White House would push for divestiture when customers are satisfied with the current arrangement.
“To me, you privatize when you’re looking to enhance services and do something more cost effectively. It’s unclear how this would accomplish any of those improvements,” Fisette said.
D.C. Budget Director Matthew T. Brown, who also is chairman of D.C. Water, said that he might support a sale to a private entity or to D.C. Water but that there was “absolutely” concern about higher rates.
“We would need a lot more information . . . to make any determination of what makes sense to consumers,” he said.
Water bills are likely to rise anyway in coming years, because any owner of the aqueduct would have to invest hundreds of millions of dollars to pay for needed upgrades to handle new kinds of contaminants such as pharmaceuticals and antibiotics fed to animals.
They would probably go even higher with a private operator. A 2016 study by Food and Water Watch, an advocacy group, found that on average, private, for-profit water utilities charged households 59 percent more than government ones, a difference of $185 a year for a typical household.
D.C. Water General Manager George S. Hawkins said he doubted that a private company could run the aqueduct more efficiently than the Corps.
But he said D.C. Water might do so, adding he was “very interested” in studying whether his agency could take over the aqueduct.
“Our inclination is it would be more efficient if we had the whole system within one management system,” Hawkins said.
The caveat: He and other local officials indicated they would not pay the $119 million price tag named in the White House budget.
Instead, Hawkins offered the unconventional argument that D.C. Water already possesses a large “ownership” stake in the aqueduct, because its payments for water have covered most of the facility’s costs for decades.
D.C. Del. Eleanor Holmes Norton (D) made the same argument, adding that the administration’s price would be too high for a private operator.
“We think the only feasible alternative is for D.C. Water to own and operate it,” Norton said.
Aqueduct General Manager Tom Jacobus expressed skepticism that customers had acquired an ownership stake through their purchases of water over the years.
The aqueduct “is on the property books of the U.S. Army Corps of Engineers,” he said.
His boss, Army Col. Edward P. Chamberlayne, who commands the Corps’ Baltimore district, said his unit would obey whatever orders it gets — but suggested it would like to preserve the status quo.
“We’ve been given a mission since 1863 to provide a clean, reliable water supply for the District of Columbia,” Chamberlayne said. “We’ve done that, and we’re prepared to do that into the future. . . . We’re the U.S. Army. If we’re given a mission, we’ll do it.”