CWA chair: Let ratepayers vote before sales of utilities
Chester Water Authority Board Chair Cynthia Leitzell gave testimony before the Pennsylvania House Consumer Affairs Committee Tuesday in support of a legislative proposal that would give ratepayers a say before their municipal water systems are sold to private interests.
“I thought it went quite well, actually,” said Leitzell following her remarks Tuesday morning. “I made my spiel and told them what our concerns are and how we think the bill would be beneficial to everyone, every citizen. They seemed engaged – you can’t tell from an eight or nine minute spiel and very few questions – but I thought it went well.”
House Bill 2597, sponsored by state Rep. John Lawrence, R-13 of Chester County, would require a ballot to be mailed to all ratepayers of a publicly managed utility contemplating a sale. The utility would also have to publish notification of the referendum in a major newspaper serving the affected municipality.
Ratepayers would have at least 30 days to return the ballot or vote online. If a majority of the ratepayers reject the sale, the Public Utility Commission would be required to disapprove it under Lawrence’s proposal, which is co-sponsored by state Rep. Leanne Krueger, D-161 of Nether Providence, retiring state Rep. Steve Barrar,
R-160 of Upper Chichester, and state Rep. Chris Quinn,
R-168 of Middletown, who also serves as secretary of Consumer Affairs.
The bill is of particular interest to the CWA, which Leitzell told the committee is embroiled in 16 separate but related court actions involving a proposed sale to Bryn Mawr-based Aqua America Inc. and its subsidiary, Aqua Pennsylvania. Representatives for Aqua did not respond to requests for comment on this story.
Aqua offered to buy CWA in May 2017 for $320 million, which the CWA board unanimously rejected, finding it would ultimately increase rates for its approximately 42,000 customers. Leitzell said Tuesday that CWA customers had saved more than $137 million since that time by paying the authority’s rates rather than Aqua’s.
Chester City officials have asserted the city has the right to reclaim and transfer the authority’s assets or dissolve the authority altogether. Selling the CWA is viewed as one avenue for the financially distressed city to put some much needed cash into its coffers and a recently appointed state receiver has encouraged Chester to pursue litigation to that end.
But as Leitzell noted Tuesday, the CWA contends that it exists “separate and apart from” the city, and that it is funded entirely by ratepayers, not city finances. She argued that Chester’s financial issues are real, but it should not be the responsibility of the nearly 80 percent of CWA customers who live outside its borders to shore up those problems in exchange for inflated prices in the future through a sale to a private entity.
“Shouldn’t the decision about the future of the authority be made by the people who paid to build the authority – the authority ratepayers?” she asked. “And shouldn’t the authority continue to be responsible to and answer to the ratepayers rather than shareholders who have as their primary goal the maximization of their shareholder income?”
Lawrence’s bill has also garnered support from a diverse group of 30 organizations statewide, which sent a letter to the Consumer
Affairs Committee ahead of Tuesday’s hearing, according to a release from at government accountability group Food & Water Action.
“Water privatization is a bad deal for the public,” said Food & Water Action Pennsylvania Organizing Manager Megan McDonough in a release. “Sales of water and sewers systems lead to skyrocketing rates and loss of local control over essential services. Ratepayers deserve a say on the future of their water – it’s their water, their voice.”
Quinn said that the sale of municipal water systems can be a good thing where the system is in complete disrepair and is being mismanaged, but that does not seem to be the case with CWA.
“It seems to be very well run, it seems to have upgraded the systems and the processes over the years, so it doesn’t seem to have the same problems that some municipal water systems do,” he said.
Quinn said he is waiting along with everyone else to see how the various court battles play out, but in the meantime he does support Lawrence’s bill and the idea of putting proposed sales up to a vote of the ratepayers.
“I will definitely push leadership to consider this legislation,” he said. “I’m all in favor of what John Lawrence is trying to accomplish and I think it’s a great idea.”