Is water company consolidation a good deal?

After its initial offer in the Chester Water Authority and its potential merger with DELCORA, Aqua America has come to town and with it are raised accolades and thrown stones.

Proponents point to a streamlining of utilities across the United States, the utility of scale and a heightened level of regulations. Opponents say private entities are beholden to their stakeholders, not their customers, and have higher costs than their municipally owned counterparts.

Robert Powelson, president and chief executive officer of the National Association of Water Companies, spoke about the dynamics he saw from 2008 through 2015, when he served as a board member and chairman of the Pennsylvania Public Commission. The former state regulator is also a

customer of the Chester Water Authority.

“I found Pennsylvania, back in 2008, had a large proportion of small, distressed water systems,” he said, adding that the state Department of Environmental Protection listed more than 2,000 systems at the time.

Powelson said through the work of the state Legislature, as well as Govs. Tom Corbett, Ed Rendell and Tom Wolf, there was a movement to consolidate those systems and the gap has narrowed to less than 500 systems.

“We’ve done a good job,” Powelson said. “You’re seeing this across the country post-Flint, Michigan,” where the municipal water supply was tainted.

He explained that municipal-owned systems plagued with problems and unable to make investments, including responses to natural events like hurricanes and flooding and then security needs to protect from cyber incidents, have been moving to private ownership.

“We agree water infrastructure should be a national priority,” he said, adding that included Pennsylvania. “(We) wanted to make sure that we have water providers that are meeting benchmark standards.”

Locally, the issue of private vs. public ownership is being played out in two arenas: DELCORA and the Chester Water Authority.

On Tuesday, the board of the Delaware County Regional Water Quality Control Authority unanimously approved entering into a six-week nonbinding negotiation period with Aqua America to consider

a potential merger. The 500,000-customer authority had been looking at solutions to comply with a 2000 U.S. Environmental Protection Agency mandate that wold require combined storm water and sewage water lines that experience problems, especially during heavy rains to be fixed.

DELCORA officials have said a price on these improvements is difficult to determine, although they’ve placed these numbers at between $300-$600 million.

The intent for the merger is that all of the authority’s 130 employees would keep their jobs and that rates for customers would remain at the level they would have been had DELCORA been in place.

“DELCORA’s priority is our ratepayers and our highest priority is keeping rates stable over time in the face of large capital costs, mandated by the Environmental Protection Agency and the City of Philadelphia,” DELCORA spokesman Jay Devine said.

DELCORA was established in 1972 and serves customers in 42 municipalities in Delaware and Chester counties. Based on an average residential retail bill with 70,000 gallons of use, DELCORA’s average annual bill is $372.

On Wednesday, board members of the Oxford Area Sewer Authority in Chester County unanimously rescinded an asset purchase agreement it reached with DELCORA, two years in the making, after DELCORA’s board chose to pursue the merger with Aqua.

“The authority was interested in transferring the system to DELCORA because they were a public entity,” said David Busch, executive director of the Oxford Area Sewer Authority. “Now, suddenly, if DEL