by Alex Rozier, Mississippi Today
April 24, 2025

This is the second half of a two-part story on small water and sewer systems. Read part one here.

A December hearing at the Woolfolk Building in downtown Jacskon started to sound like an auction: Fifty percent. One hundred. Two hundred. Three hundred. State officials watched studiously from their dais as customers recited how much their water and sewer bills ballooned in the last few years.

Judy Johnson’s sewer bill in Raymond went from $16 in 2022, to $40 in 2023, to $52 in 2024, to $67 two months after that. David Huber in Natchez said his combined water and sewer bill grew from $50 to $108 in that same time. 

“This is just for sewer?” Kathy Hardy, also of Raymond, recalled thinking when she saw the rate changes.

The three of them are among 28,000 Mississippi customers of Central States Water Resources, or Great River as its subsidiary in the state is known. In 2021, Central States – which operates in 11 states, mostly in the South – arrived in Mississippi, where it now owns 123 small water and sewer systems.

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In Mississippi, which has the lowest median income in the country, many Great River customers are seeing costs skyrocket for basic necessities that were or are still below regulatory standards. But for years, many of them previously paid low rates to providers who were, in turn, neglecting or underinvesting in their infrastructure. 

“It just cascades and everyone keeps kicking the can until a crisis happens,” said Central States founder Josiah Cox. “The butcher’s bill is coming due. These places are falling apart.” 

The result is a chasm between the perceived and actual costs of delivering water and sewer services. 

In 2014, Cox started the St. Louis-based company hoping to fill a niche: buying and restoring struggling small systems that other large utility firms wouldn’t touch. 

“Our thesis was pretty simple,” he said. “There’s small, failing water and wastewater systems all over the country. The giant publicly traded utilities don’t want to mess with them.”

Smaller companies often can’t afford administrative costs, like presenting rate cases in front of the state’s Public Service Commission. Larger companies aren’t interested because it would take years to see a return on their investment. 

While Mississippi officials at the time were happy to welcome a company with Central State’s resources, the state’s ratepayers gave Cox’s team a tepid reception, to put it mildly. 

In 2022, as the company started transitioning ratepayers to new rates to fund improvements, the PSC received letters from 800 Mississippians. They described Great River as “greedy,” accusing it of “gouging” them with “unconscionable” rate hikes. 

“We are on a fixed income and finding it difficult just (to) pay our debts and put food on the table and pay for gas and meds,” one letter from a Senatobia customer read. “I pray your office will deny this increase request.”

As it turns out, Central States’ customers had similar complaints in Louisiana, Kentucky and Missouri, and ratepayers in North Carolina and Texas have called out the company over poor water quality and pressure.

Nina McGee, a Great River customer in Panola County, said her water bill used to be just $12 a month, which she admitted was “ridiculous.” 

“I understand an increase,” said McGee, who lives in the town of Pope with less than 300 other people. “I just don’t understand why it’s got to increase that much. It’s tripled in three years.”

In the Wellsgate community, just outside of Oxford, residents sent 132 complaints to the PSC from 2020 to 2021. Most bemoaned poor water quality or water leaks. Great River bought the utility later in 2021 and found that, among other problems, the previous owner hooked up an unpermitted groundwater well – a violation of both state and federal law – that bypassed treatment and created a “blending of treated water and raw groundwater.”

Over the next two years, according to data from the PSC, Great River made about $1.5 million worth of improvements, such as adding new pumps and capacity to the water system. In 2022, PSC filings show, the company proposed raising the average water bill in Wellsgate from $12 to $47, a nearly 300% increase. Dozens of Wellsgate residents wrote the PSC in opposition.

“In no universe does this seem like an acceptable course of action,” one email said.

The company also took control of some of the state’s worst performing small sewer systems, including the ones Mississippi Today recently reported on. Many of those utilities hadn’t raised rates in years. Nearly 30 of the small sewer systems the company purchased, Cox said, never charged a rate at all. Some of those systems depreciated so much that Great River bought them for one dollar each.

At the December meeting in Jackson, Central States engineer Jacob Freeman testified to the PSC about the condition of some of the state’s sewage lagoons, a common form of treatment for small service areas like a subdivision. Freeman described lagoons he saw in the state where so much sludge had accumulated that it “breached the (water’s) surface.”

“At that point, you’ve taken up all the volume in the lagoon, so whatever small amount of treatment that Mother Nature could’ve provided originally is no longer happening, and raw wastewater is short-circuiting the lagoon, going out the back end,” he said, adding that, in similar cases, he’ll find bloodworms or pathogens pouring into the receiving watershed. “That’s dumping into a creek where maybe kids play, or flows down into another body of water that could be recreational. It’s a very, very bad situation.”  

Freeman also testified that even with the high number of sewer facilities in the state violating their effluent limits for different pollutants – about one in three have done so in the last year, a Mississippi Today analysis found – others that seem to be in compliance could be circumventing Mississippi’s relatively lax testing requirements. 

Many states, he explained, mandate quarterly or even monthly testing, versus the “once or twice annually” the Mississippi Department of Environmental Quality requires. So a utility that doesn’t meet permit limits, Freeman said, can choose to only be tested during suitable weather conditions when it’s less likely to have a violation. 

MDEQ Executive Director Chris Wells emphasized that an operator could face criminal charges for lying about their test results or misrepresenting compliance. But practically speaking, Wells explained, the agency can’t regulate every system the same way. 

“If you’ve got a system like Jackson’s that’s discharging (millions) of gallons a day into the Pearl River, that’s got much more of a propensity to cause environmental damage than a small lagoon somewhere in rural Mississippi that’s discharging 5,000 gallons a day into a tributary somewhere,” he said. “It’s not that we don’t care about that, we do, it’s just that it’s lower priority from an enforcement or from an inspection standpoint.”

In the roughly four years it’s been in Mississippi, Great River says it’s invested $27 million in system improvements, and has brought 35 sewer systems back into compliance. 

Some customers, like James Windsor in Pass Christian, say while the new rates feel steep, their service has gotten better. Windsor said his water bill went from $18 a month to $51, which he felt would be a fair price if it also included sewer.

“Are we getting our money’s worth? I don’t think so, but it is better,” he said about improvements to water pressure and customer service.

Others say they haven’t seen any difference in what they’re paying for, and also criticize Great River’s pricing model. The company spreads out its repair costs, meaning someone on the Coast’s bill may increase, in part, to pay for repairs in north Mississippi. Doing so, the company said, keeps bills affordable for small customer bases whose systems need millions of dollars in investments. 

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“I don’t think that’s quite fair,” said Andy Horyza, who lives in the Turkey Creek subdivision in Olive Branch. “If you’re living in a brand new subdivision and your costs are higher than mine, well guess what? Your costs are higher than mine, you should be covering that.” 

Horyza, who relies on Social Security income, paid around $17 per month for sewer for about 20 years until Great River bought the system in 2021. Over the next three years, Horyza said, his bill jumped nearly 350%. 

The company’s rates vary. For a sewer system using a lagoon, for instance, rates are about $42 per month, versus $59 a month for systems with actual treatment plants. For water, average bills are around $44. 

In a February vote, state regulators at the PSC sided with their angered constituents, voting 2 to 1 to deny Great River’s latest rate hike. The PSC changed hands completely in the 2023 statewide elections. Southern District Commissioner Wayne Carr won his seat with a campaign criticizing Great River. Carr and Northern District Commissioner Chris Brown argue the company hasn’t justified the rates they’re charging. 

“The service hasn’t changed, but the rates went up extensively,” Brown said, estimating that other rural customers on average pay less than $30 a month for water. “So the question is why? You’re supposed to have economies of scale. As public service commissioners, we want to make sure that rate payers are getting what they’re paying for.”

Central District Commissioner De’Keither Stamps disagreed. Stamps, the lone opposing vote, said some people would be “outraged” if they knew about the condition of their water and sewer systems, and that it’s unlikely the necessary funds to fix them will come from somewhere else. 

“I choose to operate in reality,” he said. “The campaigning is over. It’s time to govern.” 

Stamps also argued that if Great River appealed the PSC’s decision – which it since did in Harrison County Circuit Court – the company could then add its legal expenses to future rate increases. That case is ongoing. 

Leo Manuel, a Mississippi attorney representing the company, explained the previous trio of commissioners set Great River’s rate schedule, so most customers’ bills were set to increase regardless of the February vote. 

The reality, some experts believe, is that some customers of small utilities around the country are facing a seismic shift in the cost of their basic services, whether it happens now or later. Not only have many of these systems not accounted for the true financial needs of their infrastructure, but they also lack economies of scale. And for many small private systems, which don’t have the same access to government grants as public utilities, raising rates is the only way to make the difference. A 2023 federal report estimated that small water systems in Mississippi alone will need $3.4 billion in investments over the next two decades.

Greg Pierce, who directs the Human Right to Water Solutions Lab at the University of California, Los Angeles, said without significant public funding – even after historic federal influxes in recent years – water and sewer providers are faced with few other options. 

“I hate to be bleak, but what are the other alternatives?” Pierce asked. “The public entities are not stepping up to assist systems at scale. We haven’t really gotten serious about reforming the system or putting a scale of money into it that would really move the needle on helping small communities. 

“That was true even with the Biden administration, and that’s certainly true now. So I don’t know, it’s a little bit bleak.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.