17414_Authority_April_2024

50 The Authority | APRIL 2024 investor-owned utilities across the region in the past five years. Soon after the passage of Pennsylvania’s Act 12 in 2016, the Bryn Mawr-based Aqua, which owns water companies nationwide, purchased water systems in Cheltenham and Limerick, among other places. The Pennsylvania Public Utility Commission (PUC) has approved 22 acquisitions since the law’s passage. Advocates and lawmakers alike believe the subsequent spending spree to be no accident. “Act 12 of 2016 made significant changes to the way water and wastewater systems are valued for acquisition,” said state Senator Katie Muth, Chair of the Pennsylvania Senate Democratic Policy Committee at the hearing. In written testimony to the legislators, Aqua Pennsylvania President Marc Lucca defended the company’s practices, saying it has learned a lot since Act 12 was adopted. “We’ve heard concerns around the impact of purchase price on customer rates, transparency of the sale process, and ensuring that terms of contracts are met. To be clear, we stand ready to work to address those issues,” Lucca said. However, Lucca rejected any notion that Act 12 should be repealed, arguing that municipality owned water utilities do not have the funds to update their aging systems. “In summary, our nation’s infrastructure is failing because of lack of investment. We are leaving the next generation a significant problem they PA Senate article continued from page 26. need to address simply because we did not. The condition of these systems occurred long before Act 12 so I simply do not agree with the sentiment that removing it will correct these problems,” Lucca said. Public resource vs. private commodity Bill Ferguson, a co-founder of Keep Water Affordable and a New Garden Township resident, testified that private water companies exist to expand and increase profits. He acknowledged that’s what corporations do. “Our issue is with their methods used to acquire the municipal utilities, [which is] required to realize that growth,” said Ferguson. “Then there’s the municipal governments, too often infatuated by the seductive siren song of a huge candy jar of money — free money. It’s like winning the lottery but that money is in no way free. The failure of local government to properly serve their citizens is probably our biggest concern.” He said ratepayers are paying for “Big Water’s” profits and deals. He likened the publicly owned water acquisitions to offering a car dealership $80,000 for a vehicle they’re selling for $40,000. ”That’s what’s happening under Act 12. Both parties at the negotiating table want the highest price possible. You’d ask why would Big Water want to pay higher prices? It’s simple. The more they pay, the higher their profits, as long as the purchase price goes into the rate base. And that’s what Act 12 enables. It enables the increase in rate base. The water companies cannot lose. It is one sweet deal for them,” Ferguson said. Anthony Bellitto, Executive Director of the publicly owned North Penn Water Authority and a representative with the Pennsylvania Municipal Authorities Association (PMAA), said the PMAA’s stance is that Act 12 should be repealed. In the case that it is not repealed, Bellitto said the organization suggests Act 12 be amended to include a voter referendum and a scope limitation to distressed municipalities. State Senator Katie Muth introduces the panel of residents and advocates. (Photo: Kenny Cooper/WHYY) The first panel of experts focused largely on the concerns of residents and advocates. (Photo: Kenny Cooper/WHYY)