Lesson plan Grade 10 Social Studies & Civics
Public, Private, or Cooperative? Comparing Water Utility Ownership
A grade 10 lesson comparing three fictional utilities to show how public, investor-owned, and cooperative ownership change who a water system answers to.
Objectives
- Students will describe how accountability works under public, investor-owned, and cooperative water utility ownership.
- Students will compare the incentives each ownership model creates for rates, service, and long-term investment.
- Students will evaluate a tradeoff a community faces when choosing among the three ownership models.
Vocabulary
- Public utility commission
- A group of state officials who make sure utility prices are fair. Privately owned water companies must ask this commission for permission before raising rates.
Also: municipal, investor-owned, cooperative, accountability
Teacher overview
Two towns can both provide clean tap water and still answer to entirely different people, because the water utility can be owned in more than one way. This lesson compares three fictional systems: Brightwater Municipal Water, owned by a city and run by an elected council; the Sablecrest Water Company, an investor-owned business regulated by a state commission; and the Larch Valley Water Cooperative, owned by the customers it serves. Students read a short profile of each, build a comparison chart, and weigh the tradeoffs a real community faces when it decides which model should hold its water. A common student misconception is that a private company must always charge more than a public one; the profiles are written to show that the real difference is who the utility answers to and how, not a fixed price gap.
Procedure
Hook (5 min): Ask students who they think "owns" the water that comes out of a faucet in their community, and who could be voted out or sued if the water were mismanaged. Record a few answers, then explain that the answer depends on which ownership model the community chose.
Direct instruction (13 min): Introduce the three models. A municipal utility is owned by the local government, so its board is usually the elected city council and residents hold it accountable through elections and public rate hearings. An investor-owned utility is a private company that answers to its shareholders, but because water is a monopoly, a state public utility commission must approve its rates before they take effect. A cooperative is owned by its own customers, who each get one vote for a member board regardless of how much water they use. Note that under any model, a widely used rule of thumb built from two EPA benchmarks treats combined water and sewer costs above roughly 4.5 percent of household income as a high burden, so affordability is a question every model has to answer.
Analyzing the three utilities (17 min): In groups, students read the three profile cards and fill in a comparison chart with rows for "who owns it," "who sets the rates," "how a customer pushes back," and "what happens to any profit." Each group then flags one strength and one risk it sees in each model. Circulate and require each group to point to a specific line on a card as evidence for at least one strength and one risk.
Structured comparison (10 min): Build a class version of the chart on the board, taking one row at a time from different groups. Focus the discussion on the "how a customer pushes back" row, since it shows most clearly how accountability differs: a ballot for the municipal utility, a complaint to the state commission for the private company, and a member vote for the cooperative.
Exit ticket (5 min): Students answer one prompt on a half sheet: name the ownership model they would recommend for a small rural town that cannot easily attract private investment, and give one reason tied to accountability or affordability. Collect and scan; the objective is met when at least 80 percent name a model and support it with a reason drawn from the chart.
Student Handout
Print one set of these three profile cards for each group. All three utilities and the towns they serve are fictional.
Card 1: Brightwater Municipal Water
- Owner: The City of Brightwater owns the water system, and the elected city council serves as its governing board.
- Who sets the rates: The council sets water rates by vote after a public hearing at which any resident may speak.
- How a customer pushes back: Residents can testify at rate hearings, contact their council member, and vote council members out at the next city election.
- What happens to any surplus: Money left over after costs stays with the city and is kept for the water system's repairs and reserves.
- Recent record: The council held rates flat for six years, and the city's list of aging mains waiting for replacement grew during that time.
- Borrowing for pipe work: Once the council approves, the city can sell bonds that are repaid from water bills over twenty to thirty years.
- Typical monthly household bill: $64
Card 2: Sablecrest Water Company
- Owner: Private shareholders own the company, and a board chosen by those shareholders directs it.
- Who sets the rates: The company proposes new rates, and the state public utility commission reviews its costs and must approve the rates before they take effect.
- How a customer pushes back: Customers can file a complaint with the state commission and can testify when the commission holds hearings on a rate request.
- What happens to any profit: The commission allows the company to earn a set return on the money it has invested in pipes and plants, and that profit can be paid to shareholders.
- Recent record: The company has replaced about 2 percent of its water mains each year for the past decade, and the commission let it recover that spending through rates.
- Borrowing for pipe work: The company can raise money from its shareholders and from private lenders, and it repays that money through rates the commission approves.
- Typical monthly household bill: $59
Card 3: Larch Valley Water Cooperative
- Owner: The 900 households and farms connected to the system are its members and own it together.
- Who sets the rates: A seven-member board elected by the members sets rates and announces changes at the cooperative's annual meeting.
- How a customer pushes back: Each member has one vote in board elections regardless of how much water the household uses, and members can raise concerns at the annual meeting.
- What happens to any surplus: Money left over after costs is kept for repairs or returned to members as a credit on their bills.
- Recent record: The cooperative has two full-time staff members, and its board members are volunteers who serve without pay.
- Borrowing for pipe work: The cooperative has no shareholders to ask for money, so after a board vote it borrows from lenders, including a federal loan program for rural water systems.
- Typical monthly household bill: $71
From Water for Schools (waterforschools.org). This material is in the public domain (CC0) and may be copied, edited, and shared freely.
Answer Key
Comparison chart, intended entries:
- Brightwater Municipal Water: owned by the city; rates set by the elected council at public hearings; customers push back through elections and hearings; any surplus stays with the city and its water system.
- Sablecrest Water Company: owned by private shareholders; rates proposed by the company but approved by the state public utility commission; customers push back by filing with the commission; profit can be paid to shareholders.
- Larch Valley Water Cooperative: owned by its customer-members; rates set by an elected member board; customers push back with a one-member-one-vote election; any surplus returns to members or the system.
Exit ticket: Answers will vary. A strong response names one model (a cooperative is a defensible choice for a small rural town, since it does not need to attract outside investors and members govern it directly) and ties the choice to accountability (member votes) or affordability (no shareholder profit to fund).
Differentiation
Support
Provide the comparison chart with the "who owns it" row already completed for all three utilities, so students can focus on the accountability and rate-setting rows. Offer a word bank of the five vocabulary terms for the exit ticket.
Extension
Ask students to research (using only the profile cards provided) which model would likely find it easiest to borrow money for a large pipe-replacement project, and to explain how each model's ownership structure affects its ability to raise that capital.
ELL supports
Pre-teach "municipal," "investor-owned," "cooperative," "public utility commission," and "accountability" with a labeled icon for each (a city hall, a company building, a group of neighbors, a state seal). Allow chart entries and the exit ticket to be completed in short phrases.