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Chester County Press

New Garden residents respond to Aqua's proposed rate increase

09/21/2021 03:32PM ● By Richard Gaw

Photo by Richard L. Gaw         Margo Woodacre, a resident in the Harrogate North development in New Garden Township, spoke out against Aqua Pennsylvania Wastewater, Inc.’s proposed wastewater rate increase, at the township’s Board of Supervisors meeting on Sept. 20.

By Richard L. Gaw

Staff Writer

On June 29, 2017, the Pennsylvania Public Utility Commission (PUC) approved the application of Aqua Pennsylvania Wastewater, Inc. (Aqua) to purchase New Garden Township's wastewater system for $29.5 million.

After four years of negotiations, legal snags, lawsuits and other delays that involved the township, the PUC, the Bureau of Investigation and Enforcement, the Commonwealth Court and the Pennsylvania Supreme Court, the sale of the wastewater system was finally approved On Dec. 20, 2020.

Then on Aug. 20, 2021, Aqua released a statement proclaiming that they have filed an application with the PUC requesting to increase water bills for its customers by 17 percent and its sewer bills by 33 percent – and 34.7 percent in New Garden Township.

In monetary terms, if the PUC were to give approval to Aqua, it would increase a residential water bill for a typical customer using 4,000 gallons per month from $69.35 to $81.32, an increase of $11.97 a month (40 cents a day). The average monthly residential wastewater bill would increase from $55.51 to $73.95.

Any new base rates set by the PUC would not be effective until 2022.

Almost immediately after receiving the news, several New Garden Township residents collectively raised their arms in both anger and frustration – directed at the township and shared among themselves.

At the Board of Supervisors’ meeting on Sept. 20, they raised their concerns before the board.

Margo Woodacre, a resident in the Harrogate North community, said that 94 members of the 124-home development recently sent a petition to the PUC opposing the proposal.

“We’re very vocal, and when there is something that upsets us, we speak out, and that’s what we’ve done when it comes to Aqua,” she said. “As far as the sale of [the township’s wastewater treatment facility] to Aqua, it’s water under the bridge. We know it’s done. It’s a little bit of muddy water for us, because we’re the ones who are going to end up paying for the sale.”

Asking the board to do “whatever is possible” in a show of support for its residents, Woodacre encouraged the supervisors to write a letter to the PUC opposing the rate hike. In addition, she asked the board to demonstrate their opposition to the attempt by Aqua to purchase the Chester Water Authority (CWA).

The proposed increase, she said, would have an impact on Woodacre and her fellow Harrogate North, several of whom are on fixed incomes.

“We see this as a hostile takeover attempt by Aqua,” she told the board, “and while big business would love to own our water, we can’t say ‘You know what? I think I’m going to switch to Artesian. Their rates are better.’ We have no choice. So anything that you as our elected supervisors can do, we hope that it can be in support of us. We elected you. We put you in your positions.”

The board then voted 5-0 to agree to submit a letter to the PUC stating their opposition to Aqua’s proposed rate increase, and to the CWA offering its support against Aqua’s proposed purchase of the utility company.

Former supervisor and township resident Bob Perrotti said that the proposed increase is merely the latest notch in what he believes is a string of details and facts that have been kept from township residents about the negotiation and sale of the township’s wastewater system.

In 2017, Perrotti said that he requested an account summarizing the fees paid to those who helped the township negotiate the sale of the wastewater system.

“At that point, it was $343,000,” he said. We’re in 2021 now, and we’re still paying, so what’s the total going to be on that? I think that’s something that the ratepayers and taxpayers should know about what’s going on in their township. These are the things that we are paying for.”

Perrotti also said that residents who purchased a home in the township in recent years should have been partly reimbursed for the cost of installing a hook-up to the wastewater system – that he said ranges between $5,000 and $8,000.

“You sold the system, so we should have been reimbursed for part of that,” he said.

“I don’t disagree with anything you’re saying,” board chairman Pat Little told Perrotti. “We did not want a rate increase, especially at 37 percent.”

Little then defended the township’s reasons for selling off its wastewater system by giving an example.

“If you look at the patches in the asphalt in front of the Hilltop restaurant, those are all breaks in a sewer line,” he said. “That sewer line has to be replaced, and that’s one of the reasons that we don’t have the expertise or the money to go back and get the sewer system up to the standards that the [federal government wants].”

Aqua’s reasons for proposed rate hikes

In their statement, Aqua said they are requesting the increase in bills as a means of recovering the $1.1 billion it spent to upgrade its “distribution and wastewater systems, improving drinking water quality and service reliability throughout its water and wastewater operations.”

With over 490,000 water and wastewater customers throughout Pennsylvania, the company said its $1.1 billion of capital spending since the last rate request equates to an average investment of about $2,245 per customer.

“Since our last rate case, Aqua will have replaced more than 400 miles of aging water main, as well as associated valves, service lines and fire hydrants throughout approximately 5,800 miles of distribution system,” said Aqua Pennsylvania President Marc Lucca. “These critical improvements enhance service by reducing the number of water main breaks and leakage that can occur from older pipes, thereby reducing environmental impacts.

We also opened a new state-of-the-art environmental laboratory this year to help us continue our long history of providing safe drinking water to our customers and returning clean wastewater to the environment.”

The release also stated that a significant portion of Aqua’s capital program has been dedicated to upgrading and rehabilitating treatment plants and wells, including the installation of equipment to meet new, more stringent water quality requirements for increased sustained disinfection. Improvements to wastewater operations include collection system replacement and renewal, treatment plant rehabilitation to ensure reliable operation and that high-quality treated water is returned to the environment, upgrades to electrical systems, and the installation of generators to ensure continued service during power outages.

To help ward off potential external threats, Aqua also invested heavily in cybersecurity programs to protect the computer systems used to operate treatment plants as well as those used to maintain sensitive customer and company data.

If the PUC gives approval to the rate increase request, Aqua customers in New Garden would not be the only residents affected. Beginning in 2016, the company has spent $295 million to purchase eight public utilities throughout southeastern Pennsylvania, which in addition to New Garden include Cheltenham, East Bradford, East Norriton, East Whiteland, Limerick, Lower Makefield and Willistown, and is currently in negotiations to purchase the DELCORA wastewater system in Delaware and Chester counties for $277 – as well as proposed to purchase the Chester Water Authority for $410 million. 

New Garden Township’s response

The Sept. 20 meeting may have served as the first public forum of opposition, but it was not the township’s first response to the proposed rate increase. On Sept. 17 at 1:36 p.m., New Garden Township posted a letter from township solicitor Vince Pompo on its website that read:

Understandably, the Aqua customers in New Garden are concerned about Aqua’s proposed 37.4 percent rate increase. The proposal is just that – a request for increase. The request has to be reviewed and approved by the Pennsylvania Public Utility Commission (PUC), with the opportunity for public input. The increase will not go into effect until the PUC takes action. Typically, the PUC does not grant the full amount of an increase sought by a public utility.

The Township will be reviewing the basis for the proposed increase affecting the New Garden system customers, but to date we have not yet been provided with the specific information referenced in Aqua’s PUC application applicable to New Garden, so it is too early to comment on the specifics. We have asked Aqua for this information, and will share the information with residents once received.

“There are several important components of the settlement agreement between Aqua, New Garden, the Office of Consumer Advocate and other parties that was approved by the PUC which preceded the sale of the system, which relate to rate increases. Each of these points was shared with all township customers in a written notice sent to customers before the Settlement Agreement was approved by the PUC.

 “If the increase would be more than twice the system average increase for all Aqua’s wastewater divisions, the increase would be capped at twice the system average increase, unless otherwise ordered by the PUC.

The written notice estimated a conservative percentage increase of 51.67 percent, which was higher than the 37.4 percent increase Aqua is now proposing.”

The two most influential township players in the negotiations that led to the sale of the township’s wastewater system to Aqua – Pompo and former interim township manager Spence Andress – were not present at the Sept. 20 meeting. Township manager Ramsey Reiner said that the township will hold a public forum in the near future that will invite Pompo and Andress – and possibly representatives from the PUC and Aqua -- to respond to residents’ concerns.

Several in the audience asked if the meeting would be held in Harrisburg.

Township attorney William Christman said that while the PUC is not required to have a public input hearing on a more local scale, “if enough people were to reach out to them and request a local forum, there is a chance that they would do it,” he said. “Generally, [the PUC] is in Harrisburg, but of there is enough interest, they might [attend a forum] regionally. It may not be right here in New Garden, but it maybe closer than Harrisburg.”

While the letters from the township opposing Aqua’s proposed rate increase and Aqua’s proposed purchase of the CWA will soon find their way into the proper hands, Christman said that the township has no legal means to pursue their protest in the court of law.

“The township is probably an Aqua ratepayer just like anyone else, so they don’t have a bigger voice than any other ratepayer,” he said. “They are not the owner, and the sale is over.

In the case of the CWA, “the township has no bigger voice in that, either,” he said.

To contact Staff Writer Richard L. Gaw, email [email protected].