17736_Authority_August

32 The Authority | August 2024 P a . H igh C ourt W ill C onsider B enefits vs . H igher C osts in P rivate O wnership of W ater U tilities The acquisition of public sewer and water companies by for-profit companies costs consumers millions annually. By Peter Hall, Pennsylvania Capital-Star June 17, 2024 - Pennsylvania’s highest court will consider whether the state should permit private companies to acquire public water and sewer systems even when a deal is likely to increase costs for consumers. The case involves for-profit water company Aqua PA’s bid to buy a township-owned Chester County sewer system and the price approved by the Pennsylvania Public Utilities Commission (PUC) under a law that is also under legislative scrutiny. The 2016 law was intended to make the takeover of troubled municipal water and sewer systems more attractive to investor-owned companies like Aqua PA but critics say it has resulted in soaring water and sewer bills for thousands of customers across the state. “The net impact, the dollar impact, by all these acquisitions in total, is about $100 million a year that ratepayers are paying more than they otherwise would have,” Pennsylvania Consumer Advocate Patrick Cicero told the Capital-Star. “There’s significant harm, financial harm to consumers.” The Office of Consumer Advocate (OCA), which is a legislatively established independent agency that represents consumers in utility issues, challenged the PUC’s approval of Aqua PA’s proposal to purchase the East Whiteland Township wastewater system in 2022. A Commonwealth Court panel of three judges agreed with the consumer advocate, finding that the PUC incorrectly found that the benefits of the deal outweighed the harms to the public, namely the potential for higher sewer fees. The PUC, Aqua PA and East Whiteland Township asked the state Supreme Court to review the decision and on Friday, it issued orders granting their requests. The Supreme Court agreed to consider whether the Commonwealth Court abused its discretion by overruling the PUC’s findings that the sale to Aqua PA would benefit the public, whether the PUC should reject such proposals because consumers’ bills might go up, and to resolve questions about existing case law. A spokesperson for the PUC said the agency would not comment on pending litigation. A spokesperson said Aqua Pennsylvania is appreciative of the Pennsylvania Supreme Court’s decision to hear this appeal. “We are looking forward to the Court’s final decision and we will make further comment after the legal process is completed.” Governor Tom Wolf signed Act 12 to amend Pennsylvania’s public utility law in April 2016. The new law allows municipal water and sewer utilities to negotiate with for-profit utilities for the fair market value rather than the actual value of the system. The higher purchase prices, in turn, give new owners a basis to seek approval to charge higher rates, which they usually receive, consumer advocates testified during a December hearing before the state House Consumer Protection, Technology and Utilities Committee. Investor-owned companies, such as Aqua PA and Pennsylvania American Water, have purchased 22 municipal utilities under the new valuation method and won rate increases ranging from 44% to 166%, according to the PUC.