Title: The Stealth Takeover: How Big Water Corporations are Driving Up Bills and Threatening Public Water Systems

The challenge that we have today is when I have a senior citizen call me, tell me she’s peeing in the backyard because her water Bill and her sewer Bill doubled and no one cared about that.

Across the country, private companies are swooping in to buy water and sewer systems from the local governments that own them. The result for customers, skyrocketing bills more than double what they used to be at a time when inflation is hitting Americans. While it’s hard.

The motive for investor owned utilities is profit revenue, and that’s what matters. It’s not water quality, it’s not reliability, it’s not whether the customers are happy. It’s not your neighbor. It’s just a money making machine.

They present their efforts as a win win scenario to save taxpayers money and local governments from financial ruin.

Aqua pitched it is free money you can do anything you want with.

What? Really? That is just a bait and switch technique, promise the world and they deliver pain to the customers who have to put the Bill into perpetuity.

And over the past decade, investor owned corporations have successfully lobbied many state governments like Pennsylvania to make it easier and more attractive for the local governments to make the sale. And when those companies come knocking in their town, many people don’t know what’s happening until it’s too late.

It generally isn’t done in broad daylight. Nobody is for it. This is.

A story about the corporate takeover of one of our most important natural resources, the consequences for communities and how an unlikely coalition of people are fighting to keep water public and affordable.

In 2020, the Township of New Garden, Pennsylvania sold their sewer system to Aqua Pennsylvania for nearly $30 million. Aqua Pennsylvania is a subsidiary of Essential Utilities of publicly traded corporation that had more than $2 billion in revenue in 2023.

They basically came in and said, new garden, we can give you this money, you could do your whatever projects you wanna do with it. We’ll take over your sewer system. We’ll run it better than you have run it. And this would be basically a seamless transaction. There was very little in the way of hearings of very few people knew about it and quite frankly, very few people are even thinking about it. We.

Were told that it was a great deal because there was a rate freeze and a limit on how much the rates would go up after the rate freeze, that rate cap and growth rate was later eliminated. Before the sale was executed.

Everything looked about the same from maybe about six months to a year. But all of a sudden, the rates went up. They start to double and triple. And when people start to see the bills, they basically started to call awkward to say, why is my Bill so high?

My June 2022 Bill for 13,000 gallons was two hundred and thirty four dollars and twenty seven cents. My very next Bill and this is when the rate increase had gone into effect. I used 1,000 gallons less, 12,000 gallons, and the Bill was four hundred and thirteen dollars and thirty three cents. You call Aquas customer service land, they don’t, can’t help you. They don’t know what’s going on. People feel frustrated that nobody is taking responsibility for what has happened.

So why are our private companies so interested in buying water and sewer systems now? In recent years, more and more states have passed industry backed laws encouraging these sales. These are called fair market get value laws. And in Pennsylvania, they passed one in 2016 known as Act.

12. For a long time, we’ve had concerns about small water systems in terms of their capacity to be compliant with all appropriate environmental and other regulations. So that became one of the rationales to try to stimulate the market for selling a water system and its assets to a provider that could perhaps bring expertise and capacity to managing that system. Act.

12 created a process by which more factors like income, expected repairs and future revenue are included in the value of the system. This usually results in a higher sale price.

As high as a $1 billion was offered to Bucks County. For example.

In the case of New Garden, the amount offered was six times their annual budget at the time. And they see this as no, isn’t this wonderful?

However, what happens is who pays for that are to rate payers. They get to recoup those costs and they’re recouping significant cost.

Big Water companies are making their money back more quickly by charging more for the service and private systems are generally more expensive. A 2016 study of water rates in the US’s 500 largest water systems found that people with private systems paid nearly 60% more for water. In Pennsylvania, it was 84%, adding up to more than $300 per year on average.

You don’t really think about it until you’re system has been privatized and you get a Bill that was twice what it was last time.

One of the tactics that they use is basically to say that the infrastructure that we have is very poor. If they took over, then they would do a better job managing the infrastructure.

If the purpose of Act 12 was to help failing systems, that hasn’t happened in practice. Let me.

Also be clear, none of the acquisitions so far have met a criteria or threshold of being troubled systems under the Public Utility.

Code. So far, there have been 21 systems bought under Act 12. The industry’s top trade group openly encourages local officials to sell actually stable.

Systems. They want to get well run systems because it means that there’s less money they have to put into it. That’s currently.

Playing out with one of the biggest water systems in the Philadelphia area, known as the Chester Water Authority or CWA. Aqua is trying to buy the water authority from the city of Chester, which declared bankruptcy in 2022 for $410 million. The board of the CWA says Chester doesn’t have the right to sell it. Most of the utilities customers don’t even live in the city, but the surrounding areas.

We’ve been operating quite successfully, quite reliably. We are award winning authority, best tasting order in Pennsylvania. For.

Local officials, selling a utility provides a revenue boost that can be used to pay down debts and invest in other service. But often residents don’t hear the full story.

Townships are failing their constituents in how they analyze. They see this sum of money and, oh, it’s wonderful, it’s free, except it isn’t free.

And once the local government sells their water or sewer system, the high cost and limited local government budgets mean it’s almost impossible to buy that control of the system.

I have not heard anything about why Act 12 was necessary. It appears that it was lobbied for or by Big Water. Has a very effective lobby effort going on in Harris.

As lawmakers debated at 12 in 2015 and 2016, Aqua spent over half a million dollars lobbying the Pennsylvania legislature.

There’s a lot of work that occurs to grease the skates, so to speak, talking to politicians, attending board meetings, presenting misinformation by. What would happen if a company like Aqua comes in and takes over and they try to garner favor through various means.

Investor owned utilities have gained enormous political power in Pennsylvania over the last several decades. Mike Torzai was the speaker of the Pennsylvania House when Act 12 was passed. The same year he retired from the Legislature, he became the general counsel for the natural gas division of Essential Utilities, the corporation that owns Aqua, the industry’s top trade group, the National Association of Water Companies, is run by Robert F. Powesen, a former Trump appointee and member of the pencil bring you Public Utilities Commission. And the current chair of the commission, Steven to Frank was a lobbyist for Pennsylvania American Water and resigned from that job only a day after he was nominated for the commission.

Over the past three years, Essential Utilities has donated nearly 175,000 thousand dollars to candidates across the country, including Pennsylvania, and they’re lobbying against repeal or extensive reforms to Act 12.

I believe the changes to undo Act Twelve’s benefits should carefully be considered. Anything to undo those benefits would result in systems like the ones we’ve purchased or those that may still remain to continue to fail in their service.

Frustrated by their high sewer bills, Bill and some of his neighbors started a group called Keep Water Affordable, and they’ve testified at hearings and talked to people in other Pennsylvania towns about their experience.

If people fully understood the 0 options open to them, I don’t think there would be anywhere near the number of privatizations that have gone on.

Local opposition in Bucks County defeated a one billion dollar deal to sell one of the largest sewer systems in the state to Aqua. In town and medicine, residents change their town charter to try to stop the sale of the sewer system. Some state political leaders are also calling for changes to the system.

What we oppose is privatization for its own sake and privatization and consolidation at any cost or regardless of the cost to.

Consumers. The Pennsylvania legislature is debating a set of bills that its supporters hope will reduce the number of healthy systems being bought and stop costly rate hikes on consumers. The Public Utility Commission is also considering reforms, but some say those moves don’t go far enough.

I believe much of what we’re doing today is because of the potential transfer the chest, what are authority to Aqua. Would these.

Bills stop that transaction?

I don’t believe it would. I think we should repeal act fault and I have introduced legislation to do just that. The other changes that would be considered if we could not get repeal, would be a much more open system of communication during the sale process and requiring a rate payer referendum to approve the sale.

Chester Water Authority’s fate is now tied up in the courts. Its story could be a cautionary tale for people around the country about laws like Act 12 and corporate takeovers of public.

Systems. The message, I think that I would like to give to rate pairs where there is talk of a takeover or a purchase of their public utility system, them by an investor own utility. Don’t believe what they’re saying. It’s a bait and switch game and your rates are gonna skyrocket.