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municipalauthorities.org | 31 than water systems owned by the public sector ($315). Low-income households also spent a higher percent of their income on water services if the utility is owned by the private sector (4.39% of income) than if it is owned by the public sector (2.84% of income). We expect that private ownership will be related to a higher water price and less affordability after controlling for other factors. . . . We also control for state regulatory structure. . . . PA and NJ are leaders in imple- menting new regulations that favor private operators (e.g. DSIC and fair market value) (Janney Capital Mar- kets, 2013; Kline, 2018; Caffrey, 2020). Results . . . Our model results show that, among the largest 500 water systems in the US, private ownership results in higher water prices and less affordabil- ity, after controlling for all other fac- tors. Private ownership has the largest effect on average annual water bill of all model variables. Results show that the average annual water bill is $144 higher in the privately owned water systems than in the publicly owned water systems. Also, in communities with privately owned water systems, low-income households spend 1.55% more of their income on their water bills. These results hold after con- trolling for other factors, namely regulatory environment, water supply, age of system and community demo- graphics that would affect water price and affordability. All private systems in our sample are regulated. However, in NJ and PA water regulations have become more favorable to private operators than in many other states, and our model results show this leads to higher prices in those states. Only six states regulate public systems, but this has no effect on price or affordability. This may be because publicly owned systems are di- rectly accountable to ratepayers and do not have to pay shareholder dividends. Discussion . . . We found that public ownership is related to lower prices in the 500 largest city water systems after controlling for regulation, water supply and demand. Privately owned water systems have significantly higher annual bills and are less affordable for low-income families. What might explain this difference? Our results show regulation matters. In NJ and PA, regulations are more favor- able to private providers (Janney Capi- tal Markets, 2013; Kline, 2018; Caffrey, 2020). Model results show regulatory differences in these two states lead to an $89 higher annual water bill in NJ and PA. By contrast, our models found that there is no impact of regulation of publicly owned utilities on water price or affordability. This may be because publicly owned utilities have a broader interest beyond profit; they are gen- erally interested in fair pricing and affordability to their residents. Conclusion . . . NJ and PA have the next high- est levels of privatization and their prices are some of the highest in the sample. American Water and Aqua America (now called Essential Utili- ties), which are the largest US-based investor-owned water utilities, have successfully advocated for regulatory and legislative changes that facili- tate acquisitions and price increases, including ‘fair value’ legislation and DSIC to facilitate cost shifts to rate- payers (Janney Capital Markets, 2013; American Water, 2015; Aqua America, 2015; Caffrey, 2020; Gallos, 2021)4. S Source: www.iwaponline.com/wp/ article/24/3/500/87702/Water-pric- ing-and-affordability-in-the-US-public Representing Businesses, Municipalities, and Individuals affected by Government regulation, including: Public Utility, Renewable and Conventional Energy, Cannabis, Environmental, and Professional Licensure. Todd S. Stewart Dennis A. Whitaker Phillip D. Demanchick William T. Hawke, Of Counsel 100 North Tenth Street • Harrisburg, Pennsylvania 17101 (717) 236-1300 • Fax: (717) 236-4841 • www.hmslegal.com Kevin J. McKeon Judith D. Cassel Melissa A. Chapaska Thomas J. Sniscak Whitney E. Snyder Micah R. Bucy Aaron D. Rosengarten This article appeared in PMAA’s publication, The Value of Authori- ty Ownership of Public Water and Sewer Systems, which was mailed to each member complimentary. To purchase additional copies, visit our website for an order form, www.municipalauthorities. org and see page 4 for additional publication highlights.