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Opposing the hostile take-over of Liberty Apple Valley
SAN FRANCISCO — BUSINESS WIRE — Contested government takeovers of investor-owned water utilities are typically very costly for the acquiring government entity, and the utilities do not necessarily perform better post-takeover than under private ownership, according to a new research report issued today by a team of economics consultants from Analysis Group led by Dr. David Sosa. Analysis Group is one of the largest private economics consulting firms in the United States. The report, titled
Contested government takeovers involve the power of eminent domain. These actions necessitate a large commitment of time and resources, and are often challenged in court. Dr. Sosa and the Analysis Group team empirically examined what has happened in past contested transactions to gather evidence about the impact of these types of takeovers.
Arguments made in favor of government takeover of water utilities frequently cite lower costs, among the purported benefits, said Dr. Sosa.
We examined case studies of four systems where eminent domain proceedings were initiated to examine these arguments and the effects of contested acquisitions, and we found these claims to be unsubstantiated.
The four systems analyzed are based in Felton, CA, Montara, CA, Nashua, NH, and Missoula, MT. Additionally, the report examines anticipated savings from municipalizations and costs incurred during contested transactions.
The report’s key findings are:
profitsand taxes as two sources of financial benefits from a change in ownership. There is no sound basis in accounting or economics to support the expectation of real benefits to ratepayers, in the form of lower bills, from the elimination of these sources.
About Analysis Group:
Analysis Group is one of the largest private economics consulting firms in North America, with more than 700 professionals across 11 offices in the United States, Canada, and China. Since 1981, we have provided expertise in economics, finance, health care analytics, and strategy to top law firms, Fortune 500 companies, and government agencies. Our internal experts, together with our network of affiliated experts from academia, industry, and government, offer our clients exceptional depth of expertise.
Source: Business Wire