Panacea or Placebo? The Diverse Pathways and Implications of Drinking Water System Consolidation

Abstract

Scholars and policy makers alike frequently promote drinking water system consolidation as a solution to the longstanding struggles of small water systems and the related consequences of service fragmentation, including vulnerability to climate change and persistent racial and economic inequalities in access to safe and affordable drinking water. Despite enthusiasm for the concept, however, our understanding of how, why, and where consolidations occur has remained stubbornly limited such that the promise of drinking water system consolidation remains theoretical at best. This study analyzes all known water system consolidations (n = 206) in the state of California over a 7‐year period (2015–2021). We find empirical support for certain theoretical claims about consolidation, including an overall reduction in the number of regulated systems, with the largest reductions occurring among particularly underperforming, climate‐vulnerable, and unrepresentative system types. Other findings, however, do not align with the literature on the subject. We find limited evidence of either water service privatization or remunicipalization trends and seemingly limited prospects for economies of scale benefits through consolidations. Moreover, roughly half of consolidations during the study period involve non‐residential water systems. Among the consolidated community water systems, systems serving higher‐resourced communities are overrepresented compared to those serving lower‐resourced communities by a margin of two‐to‐one. It is time to move beyond the blanket assumption of positive consolidation benefits toward a more nuanced understanding of the associated opportunities and limitations. Depending on their goals, policymakers may need to support more specific types of consolidation.