What ‘they’ won’t tell you, Part 3 (January 18, 2016)
What they won’t tell you about Community Ownership of the Water System Part 3. There is a reason private investors such as the Carlyle Group are busy buying and selling water systems: Public infrastructure is big business.
According to a recent Los Angeles Times story, private equity firms raised $32.4 billion in funds in 2014 for infrastructure opportunities – a huge increase from the $3.6 billion they raised in 2005. These private investors typically require annual profits of 12 percent to 15 percent, usually at the expense of rate payers.
In the case of the Apple Valley Water System, flipping such an investment is lucrative as well. The $257 million net price Algonquin Power & Utilities has agreed to pay to Carlyle for its three water systems is more than double the $102.2 million Carlyle itself paid for the systems in 2011.
There is a reason Algonquin and others want in on the action: They see money – and plenty of it – to be made off the backs of ratepayers.
www.avh2Ours.comSource: TOAV, Facebook, January 18, 2016
OMG! Profit? Capitalism? Investment? We don’t need no filthy businessmen in Apple Valley. Our corrupt and clueless council members will provide for all our needs without asking for money. That’s what government is for, right? If we can’t get free goods and services from the government, how are we supposed to get them? We deserve everything for free because we have a better way of life here in Apple Valley, and what’s better than free?
The California Public Utilities Commission (CPUC) allows Apple Valley Ranchos Water Company less than 10 percent return on investment. This isn’t a guarantee, mind you, it is an upper limit. According to the Town, this is well below the
typical return, but instead of being a cause for celebration, we should condemn Ranchos because others make more money!
Furthermore, in addition to the initial price for Ranchos, The Carlyle Group has invested millions into our community to maintain and improve our water system. Investments such as this are repaid over time out of the proceeds from selling water. In addition to rewarding investment through the recovery of the principle plus interest, these repayments serve as incentive for future investment. Those maligned profits are why Apple Valley enjoys excellent water quality from a well-run water utility, and will continue to do so as long as the Town keeps its hands off our water.
— Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.