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Trucking Complaint

Background

Several years before Aqua acquired New Garden’s sewer system, the South End treatment facility lost capacity to dispose of treated wastewater. It was a serious problem. You cannot stop the inflow and you cannot let the treatment lagoon overflow. The “emergency solution” was to truck wastewater from the South End facility to the East End plant, which had sufficient capacity. That “emergency solution” continued for several years. It was expensive. New Garden indicated it cost about $100,000/month. The trucking continued right up to the sale of the sewer system to Aqua.

Trucking Complaint - The Issue

About nine months after acquiring the New Garden sewer system Aqua filed for a rate increase and included a $1.2 million/yr trucking cost for the full period of the forecast. It represented 65% of the operating cost for the New Garden system. However, that cost was gone before the rate increase went into effect on May 19, 2022. In fact, the evidence indicates the trucking stopped before the end of 2021 when Aqua had the opportunity and obligation to remove that cost. My complaint asked the Public Utility Commission (PUC) to investigate when the trucking stopped and make New Garden customers whole if the complaint was validated.

Trucking Complaint - The Evidence

What follows came to light nearly two years after the sale at a New Garden Township public meeting on 11/21/2022. At that meeting Aqua’s Operation Manager stated that on the day of the sale Aqua contacted a Pennsylvania regulator and declared an emergency. I am speculating here, but I suspect that New Garden left the lagoon filled to the brim to minimize their trucking cost. In any event, Aqua immediately continued the trucking. The Operations Manager went on to tell about how as soon as Aqua took over they moved to activate an abandoned pipeline to pump the wastewater instead of truck it. Here is the video of that portion of his presentation: LINK And, here is my transcript of that discussion: LINK

Pumping costs a tiny fraction of the trucking cost. Aqua was making a good move. Here are the key points made by Aqua’s Operations Manager:

#1 - Aqua moved promptly to activate the line.

#2 - Some repairs were required.

#3 - Activation took about eight months while trucking continued.

#4 - When the pipeline was started up, trucking stopped immediately.

#5 - It was complete within the first year of operation.

There are two pieces of additional evidence that Aqua eliminated the trucking operation before year end of 2022:

#1 - After the 11/21/2022 New Garden public meeting, Aqua’s president sent a letter to New Garden customers commenting on the meeting. In it he said: “Initially, we had to truck excess treated wastewater from one wastewater treatment plant to another which cost more than $800,000. After several months, we replaced hauling with a pipeline connecting the two treatment plants. lt was work our experienced, dedicated, and creative employees completed safely and expeditiously.” Here is the full letter he sent with the quote highlighted: LINK

#2 - Every year Aqua has to file an annual report with the PUC. That report includes a list of capital expenditures. Aqua’s 2021 report includes a line item titled “New Garden Dry Line Activation”. It tabulates a cost of $666,833 and that the project was in service by 12/31/2021. Here is a copy of the page from that report: LINK. The line pertaining to New Garden is highlighted.

In summary, Aqua’s Operation Manager said the pipeline activation took about eight months and was complete by year end. Aqua’s President said that after “several months” trucking was replaced by a pipeline. Finally, Aqua’s 2021 annual report indicating the “New Garden Dry Line Activation” project was complete by 12/31/2021. Three solid pieces of evidence all saying the same thing.

Trucking Complaint - Conclusions

As a result of the 11/21/2022 New Garden public meeting I figured out that Aqua never had incurred the $1.2 million/yr cost it forecast. Therefore I proceeded to prepare a complaint to file with the PUC. Here is a copy of that complaint:

I find Aqua including that trucking cost in the original filing to be highly questionable. Aqua was saying the cost would continue for nearly three years while at the same time working to eliminate it. In any event, Aqua had a legal obligation to remove that cost if it was eliminated by year end 2021. The above evidence cited clearly indicates that trucking stopped before then. But, Aqua did not remove the cost. Consequently, New Garden customers paid a total of $3.3 million for that non-existent cost.

Aqua defended the trucking cost by stating that:

#1 - The cost was never questioned during the rate case litigation.

#2 - Since the rate case is complete you cannot retroactively change it.

It is noteworthy that Aqua never stated when the trucking actually ended.

It is very likely that none of the rate case participants outside of Aqua were aware of the project to eliminate the trucking. So, no surprise, they had no reason to question the cost.

This is a second case of a situation that I thought the PUC would be shocked to learn about and take corrective action. Again, I was wrong. However, my stellar pro bono lawyer found this so egregious that we have filed an appeal of the PUC’s decision with Pennsylvania’s Commonwealth Court. Here is a link to that: LINK