Every day, Americans turn on a tap without thinking about the complex systems working behind the scenes to deliver safe, reliable water service and safely treat wastewater. Private water and wastewater providers—companies that build, operate, and maintain the systems communities rely on, have a critical role in providing these essential services. Yet many people don’t fully understand who these providers are or how they help keep water systems running safely and reliably. By understanding what private providers do, communities can better see how these companies provide life-sustaining services, meet strict regulations, and invest in the long-term health of the nation’s water and wastewater infrastructure.
How Private Water and Wastewater Providers Work
Private water and wastewater providers are non-government entities that own, maintain, and operate water and/or wastewater utilities, serving residential, commercial, and industrial customers. They are highly regulated by state governments and must meet all state and federal drinking water and wastewater standards.
Many private water and wastewater companies are more than 100 years old – still operating and maintaining utilities they originally built or at some point purchased within their current service areas as their operational, technical or financial expertise was available and capable of fulfilling a critical need for service. These companies purchase the existing assets of a city’s water or wastewater system and assume full responsibility for investing in, operating, and maintaining the system. These assets—treatment plants, pipes, pumps, sewer systems—are critical infrastructure that require ongoing investment to help ensure compliance and reliability. Over 10% of the population of the United States, nearly 37 million people are served by water systems owned by private water providers.
Private providers also make significant investments in infrastructure. For example, the 10 largest private water and wastewater providers in the U.S. collectively invested over $5.8 billion in 2024, helping address the nation’s aging water systems. This is especially important when compared to the EPA’s estimated $625 billion need for water infrastructure improvements nationwide over the next 20 years.
The nation’s largest private water and wastewater service provider, American Water, serves over 14 million people across 14 states and 18 military installations and plans to invest $46–$48 billion over the next decade in infrastructure—replacing aging systems, upgrading facilities, strengthening fire protection, and meeting the latest water quality standards.
Most importantly, large private water providers, like American Water, are dedicated to delivering safe, clean, reliable, and affordable drinking water service from source to tap and responsibly recovering, treating, and returning wastewater to the environment.
Who Benefits from Public Systems Being Sold to a Private Provider? Everyone.
- Financial Strength and Local Investment
• Cities and counties gain greater financial flexibility and peace of mind.
• Transferring water or wastewater systems can provide immediate revenue while removing future maintenance costs and liabilities.
• Funds from the sale can be redirected to community priorities—such as improving parks, roads, public safety, economic development, or addressing pension obligations.
• Private providers contribute annual tax revenue that supports schools and essential local services. - Reliable Service and Compliance Leadership
• Residents enjoy consistent access to safe, clean, and affordable water and wastewater services.
• Private providers lead in research and regulatory compliance, performing millions of tests each year to meet or surpass quality standards.
• Advanced treatment technologies help ensure wastewater is responsibly processed and returned to the environment, safeguarding public health and ecosystems. - Tailored Infrastructure Solutions
• Private providers deliver customized infrastructure improvements—from modern treatment facilities to water towers and reservoirs—designed for reliability and long-term performance.
• Investments prioritize sustainability and resilience, ensuring systems meet today’s needs while preparing for future challenges.
References
U.S. Government Accountability Office. (2021, March). Private Water Utilities: Actions Needed to Enhance Ownership Data (GAO-21-291). Retrieved from https://www.gao.gov/assets/gao-21-291.pdf