This paper analyses the debates around the shift in water system valuation from the traditional book value-based system towards a market-driven exchange approach called Fair Market Value (FMV). FMV legislation was first introduced in California in 1997 and has been introduced in the past decade in 12 additional states. What is driving this shift in state policy and what does it mean for our understanding of value? Based on a review of the FMV acquisition process, this paper explores the debates around this shift in water system valuation drawing on historical court cases, case studies acquisitions, and a review of public utility commission documents, legislative transcripts, court cases and statutes. The paper finds that FMV is a boon for regulated utilities and elected officials seeking to exchange public water and wastewater systems for windfall profits paid for through higher customer rates. FMV challenges conventional regulatory ratemaking and will undoubtedly spur discussion on the future of public asset valuation and implications for equity and affordability.