Key Information
If you are either a CWA customer or an Aqua customer, this affects you.
If Aqua is allowed to take over the CWA, all CWA customers, regardless of where they live, will pay significantly higher water rates. Expert analysis has concluded that the average residential customer in the CWA’s service area would end up paying more than $500 extra per year under Aqua’s rates. In effect, rates would double or triple for CWA customers.
This impact would be especially devastating to low income and fixed income residents, many of whom are already below the poverty line. Higher water rates—driven by corporate profiteering—can force low-income households to choose between paying their water bills or obtaining food or medical care. People who cannot afford to pay their water bills can lose their homes, lose custody of their children, and even face criminal charges. As the price of water increases, so do instances of service shutoffs, lien sales, home foreclosures, and evictions—consequences that have been shown to disproportionately impact people of color.
In addition, large commercial and industrial customers in the City and elsewhere in the CWA’s service area would end up paying millions of dollars more under Aqua’s rates. And, if the CWA is sold to Aqua, it will be CWA ratepayers who will pay for Aqua’s future acquisitions. Every single CWA ratepayer will be chipping in to provide the funds that Aqua will use when it goes down the road to the next town.
The reason for skyrocketing water rates is simple: corporate profits. In 2020 alone, Essential Utilities, Inc. (parent company of Aqua) reportedly paid its CEO, Chris Franklin, $7.2 million in total annual compensation. The Simply Wall St. article reporting Franklin’s salary explains: “We think that the total shareholder return of 42%, over three years, would leave most Essential Utilities, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.” For profiteers of the earth’s limited freshwater resources (comprising less than 1% of all water), a 42% return is just the beginning. Essential/Aqua has since reported a net income increase of 51.5% for 2021 alone, with annual profits soaring from $284.8 million to $431.6 million in just one year. Then, in 2022, the company’s annual profits increased even more, totaling $465.2 million for the year. Under a non-profit, municipal model (i.e., the CWA’s model), this money would either remain in the pockets of ratepayers or else be used solely for providing services and maintaining and improving the water system.
Even if you are not a CWA ratepayer, but instead, a current Aqua customer, this fight affects you as well. Aqua is proposing to spend $420 million to buy the CWA. The money to fund this acquisition would come right out of the pockets of current Aqua customers. As The Guardian has explained:
“In 2016, Pennsylvania became the first state to pass legislation that allows private companies to buy public utilities for more than they are worth – relying on what’s known as fair market value rather than depreciated value. Companies can recoup the over-priced investments by passing on the cost to all their customers through statewide rate hikes, meaning residents pay while shareholders reap the rewards.”
It has been widely reported that Aqua has requested rate hikes for its current customers “ranging from 20.49 percent in Bensalem to an 86 percent increase in Sun Valley.” Aqua’s requests for rate increases are ongoing — in May 2024, Aqua requested that the PUC approve yet another rate increase of $126.7 million per year.
What massive rate increases await Aqua’s customers if Aqua spends $420 million to buy the CWA?
Read more about the impact of the proposed sale of the CWA on water rates in the links below:
