The number of water providers in Pennsylvania is dwindling. The water isn’t drying up — the public utilities are, as for-profit water companies take over. In the case of Philadelphia’s suburbs, Aqua Pennsylvania reigns supreme, providing water and wastewater services to more than 1.4 million people across the state.

Read the full article here

A key hurdle for a Monterey Peninsula public water agency to acquire the assets of California American Water Co. was cleared Friday when a judge dismissed a lawsuit filed by Cal Am that the water district chief said was just one of many attempts to thwart the takeover.

Read the full article at this link.

Acting state Comptroller Kevin Walsh is trying to put the brakes on the first sale of a public water system under a 2015 law, citing problems in Egg Harbor City’s review of the water system it plans to sell to New Jersey American Water for nearly $22 million.

According to the comptroller’s office, Egg Harbor City is the first municipality to use the New Jersey Water Infrastructure Protection Act to try to sell its water supply system. The law allows municipalities to sell off or lease their water systems more easily and without a public referendum — if emergent conditions such as high contaminant levels or the need for repairs exist.

Walsh’s office found that Egg Harbor City, in Atlantic County, hired an engineering firm to act as an independent financial adviser, even though the same firm had certified the existence of the conditions necessary for the sale to proceed without public referendum in the first place.

In press release,the comptroller‘s office said it “finds that allowing a municipal engineering firm to ‘wear both hats’ negates the independence expected” by law and “also denies the governing body and the public at large the opportunity to review a report from an expert in financial matters who is detached from the proposed sale of important public infrastructure.”

Click here for the full story (subscription required)

City leaders are warning the Cumberland County Utilities Authority that its property tax-exempt status is in jeopardy, if it keeps pursuing an idea to surrender financial control to an investment firm in return for a lump cash sum.

The “monetization” concept surfaced, publicly, at a CCUA board meeting in June. The idea has torn apart the board, with some members cut out of initial talks with an interested equity firm.

There also is fierce pushback from authority customers, municipal governments, and workers. The major concern is that sewerage rates, already considered high, would increase with ruinous effect on rate payers.

For the full story, visit this link.

Aqua Pennsylvania, the Bryn Mawr company that has been buying up public utilities in the Philadelphia suburbs in recent years, is seeking to increase water bills for 445,000 customers by 17% and sewer bills by almost double that.

The combined rate increase would raise Aqua Pennsylvania’s annual revenue by $98 million, about 18%, according to an Aqua spokeswoman. In an annual report filed with the PUC, Aqua reported making net income of $188 million last year on $509 million of operating revenue.

Visit this link for the full story

With the boil advisory finally lifted, Hoboken and Jersey City are looking to hold Suez accountable for its failed efforts after Hurricane Ida.

Jersey City Mayor Steve Fulop said he will work with the city council “to hold Suez accountable.” Suez is the private water provider for Jersey City and Hoboken.

Visit this link for the full story.

We are proud to announce the release of our newest video outlining some key points on this important topic. View it below.

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.

Read the full article here.

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.