Wall Street is coming for your local power utility, and that’s bad for the fight against climate change

With a heat wave blanketing the American West—including record temperatures as far north as Washington State—climate change is dominating headlines again.

Unfortunately, there’s a worrying trend in power utilities that could make it more difficult to do something about our warming climate.

A few weeks back, we wrote about how a private equity firm is trying to take over a public water treatment system in New Jersey. (By the way, the Cumberland County Utilities Authority’s executive director just quit, citing “outside forces” meddling in the system’s finances.)

Well, that same private equity firm—the Louisiana-based Bernhard Capital Partners—has also been trying to gobble up power utilities.

According to an April post on a North Carolina business blog, “Bernhard Capital Partners has been talking with mayors and other city officials in dozens of North Carolina cities over the last year … [about managing] electric, water, and wastewater systems in return for sizable upfront payments.”

Such privatization deals (known as “public-private partnerships”) are worrisome for a number of reasons. There is potential for a loss of local control over policy decisions, higher rates for ratepayers (because the investors must make their profit), lower labor standards, and more.

Because many of these deals last as long as 30 years or more, losing local control could limit a city or town’s ability to adapt to address climate change. That’s to say nothing of the public money that leaves the local economy—Bernhard expects an annual return on municipal utilities of 8 to 11 percent.

If you’re worried about your local power utility, we just released a guide to understanding and evaluating privatization in the power sector. Download it here and help spread the word about this troubling trend.

Photo by arif_wic.