It offers a way for municipalities to utilize private sector resources and incentives to maintain, upgrade or expand existing systems. Because many private water systems are regionalized, they have the ability to provide economies of scale and a high level of efficiency. The purchase of a municipally owned water system by an investor-owned water utility will likely result in lower costs for materials, employee benefits, insurance and administration. Nationwide affiliations and mass purchasing power may result in significant savings on the cost of items such as fire hydrants, valves, pipes and meters. Private and investor-owned water systems provide municipalities, suburban areas and other entities with the professionalism, staff training, and advanced technology required to operate water systems under today's stringent water quality standards.
Private companies are well positioned to address proposed water quality regulations.
They often have better access to capital needed to construct newer, improved facilities, leaving the municipality's limited capital available for other purposes. Private water companies contribute to a community's economic base by providing quality water and dependable service which entices new businesses to the area. The companies also help the local economy by paying state gross receipts, property and other business taxes. These taxes assist in the support of community services and facilities. The EPA supports the regionalization and consolidation of drinking water systems for the public sector as a means to deal with the many financial and regulatory challenges it faces.