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Dinniman: CWA Sale Could Leave Chester County Customers Holding the Bag
WEST CHESTER (October 1, 2018) – State Senator Andy Dinniman said today that the proposed sale of the Chester Water Authority (CWA) to Aqua America could amount to southern Chester County ratepayers bailing out the City of Chester.
“If the sale of the CWA to Aqua America or another private entity is pushed through, it looks like many customers in southern Chester County would effectively be forced to bail out the City of Chester through increased water rates,” Dinniman said. “We already know that Aqua America and other private companies seem to use their public utility status to raise water and wastewater rates as high as they can, every chance they can. I’ve no doubt that they’ll do it again if they can get their hands on the CWA. I oppose the sale and will continue to fight it.”
Dinniman also pointed out that Aqua, as well as other private companies, have taken over other public water companies throughout the Commonwealth and the result has been the same – higher rates for customers.
The potential sale of the CWA to Aqua America comes as part of the effort to get the City of Chester out of Act 47 status, Pennsylvania’s designation for financially distressed cities. The city has been in Act 47, meaning the state has control of its finances, since 1995. As part of the process, the Pennsylvania Department of Community and Economic Development appointed Econsult Solutions Inc. and McNees Wallace & Nurick LLC as the city’s Recovery Coordinator in 2015. As such, Econsult recommended that the city sell the CWA assets to create revenue.
The issue has been fraught with controversy from the beginning. The vast majority – 78 percent – of the CWA’s 42,000 customers reside in Delaware and Chester counties. In Chester County they’re located in 22 municipalities: Thornbury, Birmingham, Pennsbury, East Marlborough, Kennett Square, Kennett, London Grove, West Grove, Avondale, New Garden, Londonderry, Penn, New London, Franklin, London Britain, West Fallowfield, Upper Oxford, Lower Oxford, Oxford, East Nottingham and West Nottingham.
Last May, Aqua attempted to acquire the CWA with an unsolicited $250 million offer that was rejected by the board. However, questions about transparency emerged when reports showed that Aqua executives were in discussions with the Act 47 consultant leading up to the attempted takeover.
In addition, questions remain regarding the distribution of funds from any potential sale as the CWA is no longer an asset of the city and its board representation is equally distributed between Chester County, Delaware County and the city.
Despite Aqua’s assurances to the contrary, its acquisition of the CWA would likely also lead to higher rates.
In 2017, a CWA residential customer using an average of 18,000 gallons a quarter paid $142 in its western (Chester County region). Compared to a private utility like Aqua, that same residential customer today would pay $226.
“It’s a shame that hard working residents in southern Chester County are caught up in the game of political football over the City of Chester’s financial woes. It has nothing to do with them and the idea that they should have to pay for it is wrong. It appears to all be part of an agenda driven by greed,” Dinniman said.
Dinniman also pointed out that Aqua is currently seeking Pennsylvania Public Utility Commission for approval of a $71.8 million increase in water and wastewater rates for its customers. Under the proposed rate increase, a water bill for a typical residential customer using 4,080 gallons per month would go up $9.22 from $59.85 to $69.07 — or 15.4 percent. For some customers in southern Chester County that increase would amount to nearly the double the current rates they pay the CWA. In addition, ratepayers in Penn Township would see wastewater rates increase by a whopping 84 percent.
“So, it’s almost like Aqua is already asking its existing customers to foot the bill for the CWA,” Dinniman said.
Aqua Pennsylvania has approximately 450,000 water and wastewater customers throughout the Commonwealth, serving approximately 1.4 million people in 32 counties. In Chester County, it currently serves 70,413 water and 3,336 wastewater customers.