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In what way is affordable safe drinking water at risk?

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In what way is affordable safe drinking water at risk?
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That is the question Aqua posed in The Daily Times article dated November 11, 2020. Indeed, they went one step further and stated that to question whether affordable drinking water was at risk “appears to be the rant of a conspiracy theorist.”(1)

Yet, when you look at the available evidence, it is not a conspiracy theory as it relates to the CWA. In fact, it is indisputable that if Aqua takes over the Chester Water Authority, water will be significantly more expensive for ratepayers. This is supported by the publicly available data about Aqua’s rates and CWA rates.

First, Aqua’s Main Division rates as a percentage of median household income in Chester, PA, exceed what is considered affordable water under the United States Environmental Protection Agency guidelines.(2) AQUA Main Division rates, excluding any additional surcharges the Company charges, represent 2.87% of the median household income in the City of Chester.(3) The United States Environmental Protection Agency (“EPA”) uses a guideline of 2% of household income to judge what is or is not affordable. By comparison, Chester Water Authority rates and the annual cost of water service represents 1.35% of the median household income in Chester, PA.

Second, Aqua’s promise of a rate freeze is temporary and will be followed by massive hikes forever. An average residential customer in the CWA’s service area will end up paying more than $500 extra per year under Aqua’s rates. This impact will be especially devastating on City residents, many of whom are already below the poverty line. Also, large commercial and industrial customers in the City will end up paying millions of dollars extra under Aqua’s rates. This could drive existing businesses to leave the City if faced with such large cost increases. These much higher rates will also make the City less competitive for attracting new businesses, which is key to the City’s long-term health. All of these rate increases will come with no added benefit to customers. If the DCED appointed Receiver seizes the CWA and sells it to Aqua, the DCED and the Receiver will be using CWA customers to extract a short-term bailout for long-running financial problems that occurred because of the DCED’s failures, and in the end will only enrich Aqua shareholders. An attempted sale of the Chester Water Authority is not a “win” for the City’s residents or businesses.

Third, compare the purpose and track record of the CWA and Aqua. The CWA is a non-profit municipal authority whose focus is on customers and the communities in which they live. The CWA’s credit rating is excellent. Its Better Business rating is outstanding. It recently won the highest water quality award from the Partnership for Safe Water. Its infrastructure is well-maintained. It is financially sound. Its rates are far lower than the rates of investor owned utilities like Aqua Pennsylvania, Inc.

Aqua’s focus is on delivering profits to remote corporate shareholders and institutional investors. Aqua has a long record of imposing enormous rate increases following municipal system acquisitions.  \For example, after Aqua acquired systems in Bensalem, Bristol and West Chester, Aqua more than doubled the rates. Aqua is buying a sewer system in New Garden Township, Chester County, and is poised to implement a rate increase at closing and will raise rates again in 2021 when it files its next base rate case. The New Garden Township Board of Supervisors were compelled by the Pennsylvania Public Utility Commission to issue a public notice to their constituents and that notice shows that the purchase price alone will cause rates in New Garden to increase by 52%.

As such, the answer is “the Aqua way”. The “Aqua way” is what is putting affordable drinking water at risk for the residents of the City of Chester and other CWA ratepayers.

1. https://www.delcotimes.com/news/cwa-blames-harrisburg-for-chesters-financial-ruin-on-new-website/article_2a99d10e-238d-11eb-aedf-af68fe34a9ce.html

2. According to the US Census Bureau, the Median Household Income (“MHI”) in the City (2010-2016) is $27,217.   https://www.census.gov/quickfacts/fact/table/chestercitypennsylvania,PA/PST045217

3. The Pennsylvania Public Utility Commission has a long-standing policy of moving regulated entities like Aqua, to uniform rates, therefore, it should be expected that if a rate increase is requested in 2025 at time of the next anticipated Aqua rate case, it should be expected that the rate increase would increase CWA rates close to the Aqua Zone 1 rates.  Even if the rate increases were subsidized, that would end between 2028 and 2030 and the higher rates would then kick in.

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