top of page

Status of Potential Sale of Chester Water Authority

In the past two years residents of New Garden Township have seen their sewer bills increase by over 85% and their property taxes increase by 61%, with a second comparable tax increase expected next year. In addition, our water supplier Chester Water Authority is the target of a hostile takeover attempt by Aqua PA. If this sale goes through, our water rates will double.

Unlike our sewer system, CWA remains a public utility. The sale of a healthy, well run public utility, such as CWA, only became possible in 2016 with the passage of Act 12, the so called “Fair Market” legislation. Act 12 allows private, for-profit utilities to buy healthy public utilities at inflated prices and then recoup the entire cost, plus profits, through higher rates.

The inflated price allowed under Act 12 is the driver behind the proposed sale of CWA to Aqua. Decades of mismanagement have left the city of Chester in bankruptcy. The following article provides some background: (LINK).

 

With the sale of CWA, the city of Chester believes it can use the proceeds to clean up its financial mess. Yet over 80% of CWA ratepayers do not live in the city of Chester. We will receive no benefit, but we will be left with the bill.

Act 12 is the reason for our skyrocketing sewer rates. Although it would not affect our sewer rates, repeal of Act 12 would make CWA far less attractive to Aqua.

The concept of selling public utilities to fix previous financial mismanagement is a very controversial issue. Who should pay for the past misdeeds of local politicians? Should it be the customers of CWA? Former Governor Wolf publicly supported this approach, and that is a big part of the reason CWA is under attack. Governor Shapiro has not taken a public position.

A fundamental question is whether the city of Chester can claim ownership, and thus sell CWA. This has led to a complicated legal battle.

CWA Timeline

2017

The CWA Board unanimously rejected Aqua’s $320 million buyout offer.

2019

CWA offered the city of Chester $60 million to help its financial situation in exchange for placing the authority in a trust for 40 years. The city of Chester never responded, yet Aqua jumped in and sued CWA over the offer.  At this point, Aqua shifted its tactics to position itself as the savior of the city of Chester.

2020

  • Assuming it was the sole owner of CWA, the city of Chester issued a Request for Proposals for the acquisition of the assets of CWA. As a result, Aqua offered over $420 million.

  • Governor Wolf placed Chester in receivership due to its financial problems.

  • The Common Pleas Court ruled against Chester’s claim of sole ownership and ruled that any sale of CWA requires the approval not only of the city of Chester, but also Chester and Delaware Counties.

2021

  • The 2020 court ruling was appealed, and the Commonwealth Court ruled that the city of Chester has sole authority to dissolve CWA. The case was returned to the Common Pleas Court to address some specific issues.

  • The Commonwealth Court decision was then appealed to the PA Supreme Court, asking that Court to weigh in on the ownership of CWA.

  • The Chester City Council took advantage of the Commonwealth Court ruling and unanimously passed a resolution asking the Receiver to allow them to enter into an Asset Purchase Agreement with Aqua.

2022

  • The PA Supreme Court agreed to hear the appeal of the Commonwealth Court Decision.   

  • Before the Supreme Court could take any action, however, the Receiver applied for bankruptcy in federal court. This action put a stay on any state cases.

  • There has been no reported action yet on the federal bankruptcy filing.

What’s Next

Prior to the passage of Act 12, private, for-profit utility companies could only buy distressed municipal utilities at their depreciated book value. Since Act 12 took effect, 27 municipal utilities have been sold, or are in the sale process, in PA, and none has been distressed. Recognizing the negative effects on ratepayers, concerned citizens have organized, particularly in southeastern PA, to oppose water and wastewater privatization.

While awaiting action in federal court, the activity to save CWA is focused on working with other groups who oppose privatization to lobby legislators in Harrisburg and Gov. Shapiro to act.

Several bills have been introduced in the Pennsylvania House and Senate focused on reigning in the effects of utility privatization. Unfortunately, although these bills are important, only House Bill 627, introduced by Representative John Lawrence, and Senate Bill 866, introduced by our Senator John Kane, can impact CWA.

These bills call for the repeal of Act 12. Our representatives in Harrisburg, Rep. Christina Sappy and Senator John Kane, both support the repeal of Act 12, but there is not enough support to pass this legislation.

However, there have been two recent committee meetings that show Harrisburg is beginning to understand the issue.

  • On December 12, 2023, the PA House Consumer Protection, Technology & Utilities Committee held a public meeting on four bills aimed at providing some ratepayer relief. Although these bills do not go far enough, the fact that legislators are beginning to recognize the issues is encouraging.

  • At a public meeting held January 22, 2024, the Pennsylvania Senate Democratic Policy Committee unanimously supported repeal of Act 12.  Information about this meeting can be found at https://pasenate.com/policy-hearing-focuses-on-addressing-rising-water-wastewater-rates/. Scroll down the linked page to see a video of the meeting. The meeting video starts at time mark 0:49 and testimony from ratepayers impacted by the sale of municipal utilities starts at time mark 11:00.

What can you do?

Large private utility companies continue to spend millions lobbying in Harrisburg. The fruits of their efforts are seen in Act 12. We cannot fight them with money, but politicians need our votes more than they need their money. They need to know these issues are important to us. We can only make a difference if large numbers of citizens speak out.

Residents of New Garden Township can help by writing or calling our representatives to thank them for their support, and by contacting Governor Shapiro asking him to publicly support the repeal of Act 12. Encourage him to take a public stand against the sale of CWA because of the unfair burden it places on his constituents. Sample letters can be found here https://keepwateraffordable.org/sample letters.

If you do not reside in New Garden Township you can find information about your representative here: https://www.legis.state.pa.us/cfdocs/legis/home/findyourlegislator/county_list.cfm?CNTYLIST=CHESTER

Sample letters to your representatives can also be found here:

https://keepwateraffordable.org/sample letters

bottom of page