“Allentown’s Gambit: An Irresponsible and Risky Lease,” Food & Water Watch (Sept. 25, 2012)
Chester Water Facts
July 15, 2024
In Pennsylvania, corporate takeovers of public water systems have become widespread as the result of legislation known as Act 12 of 2016 (Act 12), a law that went into effect the year before Aqua submitted its initial bid to purchase the CWA. At the time it was enacted, Act 12 was touted as a way for municipalities with water systems “urgently in need of repair or replacement” to sell the systems and thereby obtain system improvements. However, contrary to its stated purpose, Act 12 is now being used as a means for targeting healthy, well-run water systems (like the CWA) to provide a short-term cash infusion to municipalities, ensuring massive profits for the purchasing company, in perpetuity, at the expense of ratepayers and the general public.
Under Act 12, companies like Aqua can bid up the purchase price for any system to several times its “book value.” Then, as long as the purchase price is less than the average of two appraisals, the PUC is required to recognize the purchase price in the customer rates of the purchasing company. As a result, customer rates are increased to allow the company to recover 100% of its investment “plus a reasonable return on the investment” (rules that also apply to any subsequent improvements made to the system). The ratepayers end up fully funding the purchase so that companies like Aqua can go on to enjoy staggering profits.
The profit-driven motives of private water companies pose a serious threat to the human right of access to safe, clean, and affordable water. Privatization not only forces the public to give up its water rights, but also its rights to its reservoirs and surrounding open space. Affordable drinking water should not be taken for granted, nor should our natural resources which the CWA is currently fighting to protect.
Read more about water privatization and the effects of Act 12 in the links below:
https://chesterwater.com/northampton-supervisors-nix-100-million-offer-for-water-authority/
https://paenvironmentdaily.blogspot.com/2018/10/court-overturns-puc-approval-of-aqua.html
https://chesterwater.com/a-pa-law-sets-off-a-feeding-frenzy-for-public-water-systems-will-customers-pay-the-cost/
https://www.esquire.com/news-politics/politics/a32734651/chester-pennsylvania-water-supply-privatize/
https://www.theguardian.com/us-news/2020/jun/23/millions-of-americans-cant-afford-water-bills-rise?fbclid=IwAR3CIVnxWoM4FjF2210A6cTCB_cUlgM6bEkH2XZ7nuNYID_IBPjdk1lGf6k
https://www.inquirer.com/business/delcora-sale-privatization-political-utility-rates-philadelphia-water-20191001.html
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