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Agreements to put water, airports, and roads under private control often sour, because private firms guarantee investors that they will meet threshold profit targets. In Bayonne, KKR and Suez had guaranteed investors an 11 percent rate of return, and raised prices to keep up. 

Although private equity deals often involve flashy ribbon-cutting ceremonies and projects politicians can point to as progress, they often leave unglamorous maintenance spending to the city. KKR and Suez gave Bayonne $150 million upfront, but required the city to put in $157 million over the life of the contract to upgrade the water system, with yearly payments for infrastructure repairs. Added to the rate hikes, Bayonne’s mayor said, that became increasingly burdensome.

Read the full article here.

New Jersey’s Water Infrastructure Protection Act (WIPA), which was enacted in 2015, allows municipal water and wastewater utilities to enter into a long-term lease or outright sale of the utility assets to a capable owner and operator of a private (investor-owned), or public (government-owned) utility system. WIPA eliminated the requirement for a public referendum on the lease or sale of a municipal utility system if one of five “emergent conditions” is met, as certified by the New Jersey Department of Environmental Protection.

WIPA is a version of so-called fair-market-value (FMV) legislation. This legislation allows non-traditional methods for valuing utility systems, which artificially inflates the value of these systems to the detriment of customers. FMV legislation has been enacted in some form in recent years in numerous states around the country and it merits closer review from the lens of the customer.

As FMV legislation has emerged in more states, it has received increased scrutiny from legislators, consumer advocates and others as the true financial impact of these transactions on utility customers is becoming more widely understood.

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The Cumberland County Utilities Authority is losing its longtime administrator over a controversial proposal to obtain private financing.

Executive Director G. Steve Errickson said he has been excluded from “secret committee meetings,” preventing his input “into important decisions regarding the future of the authority.”

“This has made it impossible for me to continue to do my job and lead the authority into the future,” he said.

Read the full article here.

PWC has a long and successful history of reliably serving Fayetteville/Cumberland County with strategic, long-term prudent planning as well as partnering in many initiatives that have bettered our community for all. 

Read the full article here.

Pennsylvania’s water industry is drawing more attention from Wall Street, and investors thirsty for income and price appreciation may want to examine water stocks for their portfolio.

There are a few factors at play. Pennsylvania’s Act 12, signed into law in 2016, allows investor-owned utilities to charge ratepayers for the appraised fair-market value of an acquired system, rather than its lower depreciated cost.

Read the full article here.

The Cumberland County Utilities Authority is on the verge of a sewer deal that would enrich investors in a Louisiana private equity firm but hit sewer ratepayers in Bridgeton, Upper Deerfield, Hopewell, Deerfield and Fairfield with unnecessarily high private sewer rates for years to come.

Several CCUA commissioners met privately with Bernhard Capital Partners, without informing the rest and the CCUA executive director.

With scant notice, they arranged for a BCP presentation at the May meeting, then pushed for issue of a Request for Qualifications. The one issued seems tailored to fit BCP. Its submission deadline is June 15. This deal could be done in less than one month.

The pro-BCP commissioners are trying to remedy a problem that does not exist.

Read the full op-ed piece here.

Only a few lawmakers were on hand for a February budget hearing in the palatial chamber of the Pennsylvania House of Representatives. Dennis Davin, the state secretary of community and economic development, appeared remotely on a large monitor, for a second round of questions about the bid for the public Chester Water Authority (CWA) by Aqua, a private water company.

The first round of questions with state Rep. John Lawrence, a testy Chester/Lancaster Republican, did not go well and the secretary’s mood had not improved. Asked to share his department’s view on the sale, Davin claimed that he did not know what it was. Lawrence, irritated, reminded the secretary that he had been trying to get some answers for more than a year. Davin agreed to get back to him, later, with an answer. As Lawrence’s time at the podium wound down, Davin continued his evasive tactics. Finally, Lawrence noted he and his constituents opposed the sale, as did every Democratic and Republican legislator in the counties served by the CWA.

Read the full story at this link.

New Jersey American Water announced today it has signed an agreement to acquire the water and wastewater assets of Egg Harbor City, N.J. for $21.8 million. The municipally owned water and wastewater systems serve approximately 1,500 customer connections each, or 3,000 combined, and are being sold through the state’s Water Infrastructure Protection Act process. New Jersey American Water anticipates completing the acquisition in the second half of 2021, following approval from the New Jersey Department of Community Affairs and the New Jersey Board of Public Utilities.

Read the full story at Yahoo News.