This page was last updated in December, 2002.  For the latest news about Felton water issues visit:, and for the lastest news on FLOW visit:



The Privatization of Felton Water

Last updated:  12/11/02





The open letter from California American Water Company, which appeared in a full page ad in the San Lorenzo Valley Press and was quoted on its  front page, is extremely misleading. 


You simply cannot account for a $410,200 increase in revenues, the amount specified in the company's PUC petition, with the average monthly increase the ad suggests. You fall hundreds of thousands of dollars short.  (Try it yourself:  $2.34 per month * 12 months * 1350 customers = $37,908)
In fact, if the PUC grants the proposed rate increases, California American Water Company revenues for 2003 will increase by 56%,.  Residential customers will see their water bills increase by about 4.5%, commercial customers will see their bills increase by about 10%, and fire service customers will see their rates increase by 81%.  Higher water rates will apply to the school district, the fire department,  and the state park, all of which are financially strapped.       


The ad asserts that overall costs will be reduced “in the long run” as a result of consolidating operations in San Mateo, Santa Cruz, and Monterey.  Whose costs?  The company has applied for rate increases totaling more than $6 million in those three counties. 


Publicly owned water is the way to go, and many of us are working toward that goal.


Tod Landis
PO Box 688
Ben Lomond CA 95005
831 336 1620



There is a proposal before the PUC to raise the water rates in Felton by an average 56%.  This came as a shock to Felton residents, who already pay higher water rates than customers in a neighboring, publicly held,  water district.   A Town Hall meeting was called in the Felton firehouse, where firemen moved fire trucks to make room, and 160 residents attended.  Following the meeting, the County Supervisor, Jeff Almquist, joined with some 1200 residents to file protests with the state PUC.


The company raising the water rates in Felton is California American Water.  CalAm has also petitioned the PUC to raise water rates in Monterey, Montara, and Sacramento.  It is a subsidiary of American Water Works, an American corporation  based in New Jersey, which has other subsidiaries across the country with names like Illinois American Water, Connecticut American Water,  Missouri American Water, and so on. 


American Water Works  is being acquired by an English company, Thames Aqua Holdings , which, is owned by a German multinational corporation, RWE AG.   To make this clearer, if the PUC approves, the chain of ownership of the Felton water system will look like this:   


        RWE AG

           Thames Aqua Holdings

              Thames Aqua Holdings, US  (a new entity)

                 American Water Works Company

                    California American Water


As the West Virginia Attorney General pointed out recently (see below), RWE AG may have protection from regulation, under international trade treaties, that California American Water, by itself, would not.


At the request of Felton residents,  Supervisor Jeff Almquist is protesting the rate increases and working with the SLVWD board to see what it will take to buy out CalAm,.  At least one SLVWD board member believes that Felton residents will be able to pay off a bond to buy out the system at its fair market value, pay normal SLVWD rates, and still see their water bills decrease.  Obviously, whether this works or not depends on the value set for the company’s assets.


The purpose of this web site is to provide links to sources of information about the Felton water company crisis and the water privatization problem, in general.   The Public Citizen “Water for All” page is the place to start, if you have never visited it before. 


Certain aspects of the situation have received little media attention.  Most importantly, I believe the pattern of political contributions by California American Water to federal and state representatives should receive more attention, particularly the $100,000 the company gave to each of the two major parties..  The relationship between American Water Works, the Bush administration, and RWE is also troubling. 


NAFTA and GATT, potentially, may limit the ability of the state and County to regulate foreign corporations engaged in delivering water to Felton residents.  If this is the case, as it appears to be, our state Attorney General should become involved in the PUC proceedings..


There is a tendency for people to believe that the PUC is completely fair and impartial in deciding the matters that come before it.  Unfortunately, this is not be the case.  As time, goes on this web site will provide details about the PUC and the political process that determines its make up.


Blue Gold,  by Tony Clarke and Maude Barlow, is a book about globalization and the coming worldwide water crisis You will find “American Water Works”, “Thames Water” and “RWE” all listed in the book’s  index.  (Tony Clarke and Tod were  interviewed recently on  KSCO radio). 


The Santa Cruz Public Library has a draft document,  published by the County Water Commission in 1998, which clearly describes the local water resource picture.  The library also has copies of the SLV watershed management plan. 


If you find errors here, or have additional material to add, please send email to: .


Political Contributions

California-American Water Company, the water company requesting rate increases in Felton and Monterey, made political contributions to Bruce McPherson, John Laird, Fred Keeley, and Gray Davis.  They should give the
money back. 

American Water Works Company also donated $100,000, each, to the Republican and Democratic parties and another $2500 to Sam Farr during the elections for the year 2000. 

President Bush has appointed  Marilyn Ware, the Chairman of American Water Works, to his National Infrastructure Advisory Committee, representing "the drinking water and wastewater providers of our economy".  Meanwhile, Ware is also a member of the Economic Advisory Board for RWE AG, the German multinational corporation planning to acquire American Water Works.   Ware is active in the Republican Party and was a campaign chair for Tom Ridge;.

Our local representatives, at least, should give the money back.  The amounts to be returned are:  McPherson-$750, Laird-$1000, Keeley-$1000,Davis-$12,500, and Sam Farr-$2500. Small enough to be returned. 

There are more details about political contributions in:  Some Surprising Political Contributions


Public Citizen’s "Water for All": ; The main page for the “Water for All” campaign.


Public Citizen "Cities Going Public":  :  A summary of efforts to restore water systems to public ownership; several of these were owned by American Water Works, the same company that owns the Felton water system.


Santa Cruz County Government: 


  Water Quality Reports


  … but no mention of the Lockheed plant on Ben Lomond Mtn.  Is there a potential for rocket fuel contamination?

  See Environmental Working Group:


LAFCO:  The Santa Cruz LAFCO must approve extending the San Lorenzo Valley Water District to include Felton, before the district can acquire the Felton water system.  If this process takes too long, the trade issues (described in the AG’s brief above) will come into play and may block the purchase.


SLVWD: The San Lorenzo Valley Water District board of directors budgeted money to investigate acquiring the California American Water Company property in Felton.  It will consider using eminent domain.


California American Water Company:  The state company web site.


American Water Works Company:  The parent company web site.  Lots of interesting information for investors—and rate payers--here.  The company ticker symbol is “AWK”.   


CNN Money on American Water Works Company: Quick access to company officers & financial info.


Environmental Justice Water Coalition: This group recently sponsored workshops on water privatization and California state water bonds.  


Blue Gold, by Maude Barlow and Tony Clarke, can be ordered from local bookstores.  Subtitled “The fight to stop the corporate theft of the world’s water”.   RWE and American Water Works are in the index.


California State PUC

Public participation hearings have been scheduled for the Sacramento, Montara, Monterey, and Felton rate protests.  They should be announced soon.


PUC:  This is the main site for the California state PUC. You can search for the proceedings at this site.   These are the relevant proceeding numbers involving California American Water:


A 02-01-036 merge American Water Works with Apollo Acquisition Company
P 02-02-003  amending a regulation (jointly requested with PGE?)

A 02-04-022 increase  rates for water service in its Monterey Division to increase revenues by $5,725,300 …

A 02-05-058 authorize the company to provide wastewater services in Monterey …
A 02-09-030 increase rates for water service in its Sacramento District by $8,198,700 or 50.77% …

A 02-09-031  increase rates for water service in its Larkfield District by $512,800 or 33.3% …

A 02-09-032  increase  rates for water service in its Felton District by $410,200 or 56.62% …

A 02-09-033  increase rates for water service in its Montara District by $234,200 or 18.69% …


Evidentiary Hearing for Felton Rate Increase scheduled for 3/24/03 

Conditional Approval of Merger into RWE 11/15/02


California PUC Protests

Montara:,  and  The Montara Sanitary District is working with community residents to buy out California American Water in Montara.  They are way ahead of Santa Cruz:   See the SF Chronicle links and PUC approval of the merger for more.


Other States

West Virginia Attorney General Brief (RWE acquisition; describes WTO and GATT Pitfalls)  (a DOC file)   The West Virginia AG suggests that GATT, GATS, and NAFTA contain provisions which impose sanctions on regulatory agencies which "unnecessarily" impede the import or export of water -or- "discriminate" against foreign providers of services, which "in all likelihood" includes water distribution services. 


Kentucky Attorney General Brief (a PDF file) filed with Kentucky Public Service Commission concerning the RWE acquisition



Roll Call for HR5110, (29-NOV-1994)    

“To approve and implement the trade agreements concluded in the Uruguay Round of multilateral trade negotiations. “

By passing this bill, sponsored by Dick Gephardt, the House approved GATT  Pelosi, Farr and Eshoo all voted ‘Yea’.


State Water Resources Control Board

Joint Task Force on Watershed Management:


Newspaper Coverage

Santa Cruz Sentinel:

County to protest Felton water rate hikes By JONDI GUMZ SENTINEL STAFF WRITER October 3, 2002

Supervisor to state: Deny water-rate hikes By JONDI GUMZ SENTINEL STAFF WRITER October 29, 2002

San Lorenzo Valley Press:

Almquist Formally Protests Cal-Am Water Proposals

The paper has also run ads placed by California American Water, one a full page spread.  Speaking of ads, CalAm  also bought the back cover of the September issue of California Journal.


Monterey Herald

Cal-Am takeover study approved:

Moss Landing Desal Plant favored:


SF Chronicle

Montara Residents Fight…:


SJ Mercury News

S.J. agrees to consider water deal:  Note the $5000 contribution to Mayor Ron Gonzales.

Audit says S.J. better off keeping water operation:


Magazine Coverage

The Nation:  “Who Owns Water?”:


Mother Jones  “Water for Profit”: 


Local Organizations

San Lorenzo Valley Women’s Club:


These sites may interest you too…


Blue Planet Project:  From their site:  The Blue Planet Project is an international effort begun by The Council of Canadians to protect the world's fresh water from the growing threats of trade and privatization.”

FLOW:   From their site:  “Bluegrass FLOW is a private non-profit citizens group working to ensure local control over our water resources — and our future — in the Bluegrass region.”

CalPirg Water Watch:  From their site:  “CALPIRG Water Watch is a joint program between CALPIRG Charitable Trust and the Southern California Wetlands Recovery Project. Water Watch works to empower students and community members to address water quality problems in California through education and service.”

ITT:  The ITT Guidebook to Global Water Issues, with an introduction by Senator Paul Simon, author of “Tapped Out”, and commentary by a Fortune editor..


World Bank:  The Political Economy of Corruption “Susan Rose-Ackerman looks at the opportunities for illicit gain between the public and private sectors, the determinants of the size and incidence of bribes, and the political, economic, and distributive effects of corruption.” 


UC Institute for Governmental Studies:  When It Comes to Buying Votes Every Dollar is Not the Same:


County of Santa Cruz Environmental Health Services: 

Water Quality Reports


Coastal Watershed Council