Daily Local News (West Chester, PA)

Aqua’s applicatio­n to acquire utility on hold

Pending Chester’s bankruptcy petition

- By Kathleen E. Carey kcarey@delcotimes.com

Hearings before the Pennsylvan­ia Public Utility Commission regarding Aqua Pennsylvan­ia Wastewater’s applicatio­n to acquire DELCORA scheduled for Feb. 14 and 15 have been canceled.

On Friday, the office of Receiver Michael T. Doweary filed a motion in bankruptcy court seeking a stay in the proceeding­s.

On Monday, Administra­tive Law Judge F. Joseph Brady agreed, putting the Aqua Wastewater applicatio­n on hold until the Chester bankruptcy is finalized and another related matter in Delaware County Court of Common Pleas is finalized.

“We’re pleased with the decision and the receiver will continue to ensure that Chester’s rights are protected in any sale,” Vijay Kapoor, Doweary’s chief of staff, said.

Samantha Newell of the Rudolph Clarke LLC team representi­ng DELCORA provided a statement.

“We have reviewed the decision of the Administra­tive Law Judge,” it read. “We have not yet had the opportunit­y to review the implicatio­ns of the decision with the DELCORA Board of Directors and until such time as we do, we have no further comment.”

Aqua also released a statement following the stay order.

“Aqua Pennsylvan­ia disagrees with this interim order and will ask the Pennsylvan­ia Public Utility Commission to proceed with the approval process for DELCORA,” it read. “We believe we are the right partner for DELCORA, and we’re committed to working toward a positive result that will benefit Delaware County residents.”

DELCORA treats wastewater for approximat­ely 500,000 customers in 46 municipali­ties in Delaware and Chester counties. Each day, it collects and conveys an average daily wastewater flow of approximat­ely 60 million gallons.

Long road to now

This matter began in September 2019 when Aqua Pennsylvan­ia signed a $276.5 million asset purchase agreement with the Delaware County Regional Water Quality Control Authority in a move the parties said would push back looming infrastruc­ture costs for customers over the next decade.

A 2019 Aqua appraisal for DELCORA valued the system at $408 million.

As part of the agreement, DELCORA planned to place the proceeds of the transactio­n into a trust to provide payments to customers to assist with future bills, in essence, stabilizin­g the rates.

In May 2020, Delaware County Council filed a complaint in Delaware County Court of Common Pleas maintainin­g that DELCORA had violated the terms of the Municipali­ty Authoritie­s Act in establishi­ng this trust. This matter was eventually appealed to Commonweal­th Court.

That same month, the county filed an applicatio­n to intervene in the PUC proceeding­s, stating that Aqua’s pending acquisitio­n was not in the best interest of the public.

In 2021, a panel of administra­tive law judges recommende­d that the PUC reject the sale of DELCORA to Aqua. On March 30, 2021, the PUC vacated that recommenda­tion and remanded the matter to the administra­tive law judge for further proceeding­s.

On April 16, 2021, Brady stayed those proceeding­s. Eleven days later, Aqua filed a petition seeking a lift of the stay.

Seventeen months later, in July 2022, the PUC lifted the stay and directed the administra­tive law judges to promptly schedule the hearings. In October 2022, Brady released a schedule, including hearings to be held Feb. 14 and 15 of this year.

On Jan. 18, DELCORA filed a complaint in Delaware County Court for declarator­y judgment, naming Delaware County and Aqua as defendants.

On Friday, the Chester receiver filed a petition in the U.S. Bankruptcy Court for the Eastern District of Pennsylvan­ia for an automatic stay of proceeding before the PUC. In November 2022, the receiver had filed for Chapter 9 bankruptcy so that Chester could resolve its financial debts and disputes.

Kapoor spoke to Friday’s action.

“The receiver filed this motion to protect the city’s rights regarding its sewer assets in the event that DELCORA is sold,” he said. “The receiver tried to intervene in the PUC matter on behalf of the city, but was denied by the PUC. Consequent­ly, he had no choice but to take this matter to the bankruptcy court.”

In filing the petition, Doweary wants to protect the city’s reversiona­ry interest in the sewer assets based on language in the 1973 agreement creating DELCORA. Although based on this, the wastewater treatment plant would not revert, the pipes that take the wastewater to the treatment plant would.

On Monday, Brady ordered the stay, cancelling the Feb. 14 and 15 hearings. In addition, he ruled that the parties including Aqua and DELCORA should file status reports every 90 days until the stay has been lifted.

 ?? MEDIANEWS GROUP ?? The Feb. 14-15 hearing before the PUC considerin­g the Aqua Wastewater applicatio­n regarding the acquisitio­n of DELCORA has been canceled.
MEDIANEWS GROUP The Feb. 14-15 hearing before the PUC considerin­g the Aqua Wastewater applicatio­n regarding the acquisitio­n of DELCORA has been canceled.

Newspapers in English

Newspapers from United States