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Comment by InsidiousWombat | Hacker News Reader

Privatization of utilities was always bad idea. We had a lot of it in Poland, mostly driven by "govt owning it is communism, we want to get away from what" and it just made it near universally worse

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Natural monopolies are always the first suggestions to keep public owned. And you can't have 2 water suppliers piping into your apartment from the source

You can. It is just that the costs of pipes (wires) are so high that you can't both charge a reasonable price and pay for the pipes. This is why most farms are on private wells - $10k to drill a well is cheaper over 50 years than pipes to each farm. (Many Iowa farms are on public water not a well because wells in those parts tend to not produce enough water for a house's need - and they pay a lot of money per month to pay for those pipes)

This is why we say utilities are a natural monopoly. If you have the pipes/wires in place and even a little paid off you can undercut and competitor until they are bankrupt.

Even if there is only one set of pipes under the street, the owner of those pipes is constrained from acting in a predatory way if the market is free. They are disciplined by potential competition (if prices too high or lets the water quality drop, it suddenly becomes financially viable for a competitor to dig a rival pipe, or set up localized system, or offering water trucking to your site).

Under a government-granted monopoly, that threat is legally banned (except for maybe water trucking)

You are correct, but only at unrealistic levels of bad. A potential competitor risks that they lower the prices after the have dug in the pipes and that is enough that the competitor is bankrupt. Even if water quality is the issue, it is easier and cheaper for the incumbent to fix the issue than for you to dig in new pipes. Only in the case where the incumbent has worn out pipes that all need to be replaced at once (unlikely - pipes last a long time and we have had good success relining pipes in many cases: leaving only a minority that need expensive replacement at any one time).

Because the bad has to be unrealistically bad before someone can compete nobody sane will.

>only at unrealistic levels of bad

Bad water or water service is not unrealistic.

It took FIVE YEARS for Flint Michigan's water to be re-declared "safe to drink without a filter." The solution involved FEMA and the National Guard.

That can't have been the best way.

Even if allowed it would take more than 5 years for a private company to put in enough pipes to compete in Flint.

It would not take 5 years for a competing interest to complete a takeover bid of the water utility and implement faster/better fixes. Nor would it take 5 years for water customers (if they could) to divert the money that funds the municipal water district away from them and towards an alternative like water filtration or truck deliveries

It would take five years to complete all that. We'd certainly hope that they can manage your project better and get it started sooner than that but there is a lot of labor and there's only so many crews can do it and so many so much equipment. Your competing water utility could certainly serve the first customers in two or three years, but there's a lot of work needed and I would be surprised if they could get the whole town done in even five years.

Government granted monopolies are granted under oversight and regulation that would be extreme in any other scenario. Many of them don't even get to set prices. No discipline or market forces needed. The regulators just regulate predatory action.

In your example no one is going to dig a rival pipe because you can't just go around installing pipes under other people's roads and land. The permission to do that is granted to a single entity by the government, further reinforcing the natural monopoly. There is no situation where it is economically feasible to lay more pipe when you have no right to do that.

Yeah nah, nobody getting entirely new pipes dug up under the infrastructure that's already on top of it to save few cents per litre. If you're big water using industry it might make sense but for anything residential it doesn't

Privatization supporters seem to always use waste as a boogeyman, but never the inevitable profitmaxxing for management and shareholders.

Utilities have made $200B+ in profit since 2021, new report says - https://www.utilitydive.com/news/utilities-have-made-200b-in... - March 17th, 2026

That's $200B that could've, in some parts, gone into grid investment and lower electrical costs. Instead, it's the rake for financially engineering being a middleman.

I'm confident this is solved for in the long term with more coop and muni ownership of grids, alongside rapid deployment of solar and batteries so folks can go off grid if they want, as is happening across Pakistan [1] [2]; in the interim, it's annoying though, and for those who cannot afford to be squeezed for these profits, painful.

[1] https://news.ycombinator.com/item?id=46070915

[2] https://news.ycombinator.com/item?id=50145248

(non profit, coop, and muni grids can go to the bond market just like an investor owned utility to borrow for grid investment capital, so this is not an excuse for investor owned utilities to exist)

https://www.electric.coop/electric-cooperative-fact-sheet | https://www.electric.coop/wp-content/uploads/2026/09/2026_NC... [pdf version]

> Privatization supporters seem to always use waste as a boogeyman, but never the inevitable profitmaxxing for management and shareholders

That’s because under capitalism, waste and inefficiency are touted as the ultimate evil. Making profit is the entire purpose of the whole system, so it’s inherently good, and “the right thing”.

Especially in the US, even talking about a reduction in profit is akin to blasphemy, and quickly gets one labeled a quack.

It's unfortunate, for sure. Luckily, clean tech manufacturing and deployment will eventually outpace the ability to capture energy for returns [1] [2]. China currently has enough solar PV manufacturing capacity for double current global demand, and battery manufacturing capacity is catching up. Prices will keep coming down, and eventually everyone who wants to go off the grid and has space for batteries and solar should be able to.

Just like China is cramming down legacy auto export TAM through their EV exports (BYD has surpassed Ford in international sales as of this year, as is constrained by not having enough marine vessels to export more), solar and batteries will come for investor owned utilities as well.

[1] https://ember-energy.org/data/china-cleantech-exports-data-e...

[2] https://www.iea.org/reports/solar-pv-global-supply-chains/ex...

Without a doubt you are right.

My comment was about a lot more than just utilities. Healthcare, education, transit, etc etc.

Right, I'd rather lose 15% of cost to waste/inefficiency than increase cost by 25% to put money in someone's pocket.

This guy thinks waste in government is only 15%.

At the low end, the GAO estimates of federal spending, 3-7% is fraud, 3% is improper payments, 7-10%+ is legal but wasteful (e.g. zombie programs) - totaling 13-20%.

In the middle, DOGE (don't smite me, just citing multiple sources) estimated 30-33% was waste.

And at the high end, the American public according to Gallup polling perceives 59% to be waste. https://www.cato.org/blog/americans-say-federal-govt-wastes-...

NEE profit margin is currently 40.37% https://www.macrotrends.net/stocks/charts/NEE/nextera-energy...

From that, NEE pays 43.72% in dividends.

So we can say that 17.64% of the amount paid for energy to this company is wasted in dividends ALONE.

Just to put some numbers on the waste on the private side.

Accounting earnings are not simply the markup on electricity, or revenue collected from electric customers minus the cost of supplying them. NEE's financials include many other things such as investment earnings, gains from the sale of assets, energy futures and tax credits

DOGE isn't a source so don't cite them. They just made shit up.

The American public is stupid and wrong and their perception is not useful here. They will believe the government wastes 50% of every dollar because they have been told that, even though it's just stupidly wrong.

The GAO is actually the only information you provided. They are trustworthy and happy to be critical of every administration, and they don't get enough love for their important work.

I don't know if you realize this, but 3-7% literal fraud is actually a pretty good number for a very complicated system. 15% "waste" where it's hard to even define what "waste" is is also a good number.

Visa and Mastercard accept far higher for a far simpler fraud profile.

Also you said "This guy thinks waste in government is only 15%" and then the only data you provided has to wave many hands to get up to 13-20%. What the hell man?

Is this a serious take? Citations from DOGE and American perception?

Private companies also have waste. And in industries where they have effective monopoly on the market the waste isn't really capped by competition too

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