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Aqua's 2022 Rate Increase

 

The charts that follow give some idea of the magnitude of the "rate shock" New Garden ratepayers suffered when they received their first bills after Aqua's rate increase went into effect. 

The Actual Rates

NG Rate Increases 21-April-2024.jpg

The 2016 column represents the rates in effect when the sale was announced.  It also should have been the basis for the rate cap that was part of the original sales contract.  There is an extensive story behind the rate cap told here (LINK)

 

2021 is the first year Aqua owned the system  That rate is the result of the three step rate increase instituted by New Garden near the end of 2018.  

2022 was Aqua's first increase for New Garden.  We think the "rate shock" is fairly obvious.  And, the 146% increase is totally shocking.  New Garden's claim that a nearly 80% increase was needed to repair the system sure looks attractive opposite the actual 146% increase.  And, as detailed here (LINK), that 80% claim was likely grossly overstated.

Another View Of The Increase

Aqua 2022 rate increases 21-April-2024.jpg

This chart shows the impact for all customers, depending on their consumption.  The hardest hit is the ratepayer using a modest 5,000 gallons/quarter.  The smallest increase was for residents using zero water.  Obviously, that is a small number.  It represents people on vacation, spending the winter in Florida or a person in some sort of distress situation. 

It should be pretty clear that the "rate shock" was pretty broadly distributed across most customers.

Reality Versus Promises

NG Actual Rates 30-Nov-2023.png

The green bars on the above chart show the rate cap as agreed in the original sales contract.  The red bars are what rates have actually done.  And, it is very likely there is another significant increase coming with Aqua's next general rate case.  The blue bars show an estimate of that increase.  This is just one more view of the stark difference of what was promised versus what actually happened. 

Why Such Large Increases?

The primary driver for the rate increase is Aqua's profit.  Like all or most municipal systems New Garden operated on a non profit basis.  Transitioning from New Garden's non profit status to Aqua's for profit business model requires a LARGE rate increase.  That is covered in some detail here (LINK). 

There also seems to be a secondary reason for the large increases.  There is significant evidence that Pennsylvania is the most expensive state for water and sewer service, at least where Essential Utilities (Aqua) and American Water do business.  That is covered here (LINK). 

The bottom line is that as a result of any privatization of a municipal system, somebody is going to be hit with large increases.

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