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Website Structure

Here are links to all the topics covered on this website

Recent Site Additions: (LINK)

The Basics

A page summarizing the fundamental issues (LINK).  The topics covered are:

#1 - Water - a universal need

#2 - Supply options

#3 - A natural monopoly

#4 - For-Profit versus non-profit

#5 - Privatization of public systems

#6 - Fair Market Value

#7 - Website purpose

The Playbook

 

When a municipality and Big Water are cooking up a deal, there are a number of common themes that play out.  We call it the "Playbook" (LINK).  The elements include:

#1 - The "Big Picture" - five charts summarizing what is going on (LINK).

#2 - A suitcase of money (LINK).  Lots of money.  Supposedly "Free Money".  We sometimes call this the irresistible "candy jar" offer.

#3 - The suggestion that a municipality should not be in the utility business - leave it to the "pros" (LINK). 

#4 - Claims that the system is "falling apart" and needs Big Water to fix it (LINK).

#5 - Without a sale, a huge rate increase will be needed (LINK). 

#6 - Big Water can supposedly do it cheaper (LINK). 

#7 - There may be a promise of a rate cap for some period of time (LINK).  But, beware what happens when that rate cap expires (LINK).

#8 - There may be a promise to set up a rate increase mitigation fund (LINK).  New Garden made this promise multiple times in writing, but ultimately declined to do it (LINK)

#9 - The above items are "what" happens.  Here is a "Roadmap" about "how" it happens (LINK)

Legislation in Pennsylvania

 

Since 2012 Pennsylvania has passed two major pieces of legislation favorable to Big Water acquiring municipal water and sewer utilities (LINK).

Act 11 in 2012 (LINK).  This allows Big Water to move some costs between systems.  It has been used to soften "Rate Shock" after a system has been sold.  This is often a "Beggar Thy Neighbor" situation (LINK)

Act 12 in 2016 (LINK).  This is Pennsylvania's version of Fair Market Value.  We have also put together a bit of history on the passage of Act 12 (LINK)

PA legislature - There is activity in the PA legislature to repeal or limit Act 12.Here is a link to specific bills that have been introduced:  (LINK).  The Senate Democrat Policy Committee held a hear on January 22, 2024 to consider repeal or modification of Act 12.  Two co-founders of Keep Water Affordable testified at the hearing.  Full details here: (LINK).

Big Water in Pennsylvania

 

Here is a profile of Aqua and American in PA (LINK). 

Both companies are open and explicit about their growth strategy (LINK).

The differences between for-profit and non-profit

 

The economic differences between a for-profit utility company and a non-profit municipal utility are striking.  The following pages try to illustrate the differences without getting into too much financial mumbo jumbo. 

#1 - Here is a place to start.  It covers many aspects of the issue and links to most of the items below (LINK)

#2 - Direct comparison of for-profit versus non-profit (LINK).

#3 - When a municipal utility wants to sell itself to a Big Water company, it should ask itself: What is the next best alternative?  If that is done objectively, we think they will find there is actually a better alternative - at least better for their constituents.  Learn more here (LINK). 

#4 - How an investor would compare for-profit versus non-profit (LINK).  Sorry if this gets into numbers too much. 

#5 - Depreciation (LINK).  This is a major difference between for-profit and non-profit utilities.  It is also a difficult to understand subject.  This page tries to make it clear. 

#6 - Interest cost (LINK).  This is actually a plea for help.  Interest is a major cost for Big Water utilities in Pennsylvania - and ratepayers pay the full cost.  Yet there is a PA Supreme Court ruling that says interest is not an allowable cost.  Is there a legal basis to charge ratepayers with interest costs?

Our New Garden Experience

 

Our sewer system was the first one sold under Fair Market Value in Pennsylvania.  We think we were sold a very bad deal.  There are a number of elements to this story.  The main driver seemed to the the $29.5 million purchase price, which was going to do wonderful things for New Garden.  But ....

#1 - To start, here is a summary of the sale process (LINK)

#2 - The claim that the system was falling apart (LINK). 

#3 - The claim that an almost 80% rate increase was needed without a sale (LINK).

#4 - The promise and taking away of a ten year rate cap (LINK).  And, the subsequent rate increase (LINK).

#5 - A three step, 30% rate increase in the middle of the sale process (LINK). 

#6 - The role of trucking wastewater (LINK).

#7 - When we were hit with big rate increases in 2022, we pressed New Garden for answers on the above issues.  New Garden agreed to hold a special meeting on the issue.  We think it was a total fiasco.  Here is the story (LINK)

#8 - Multiple times New Garden residents were promised in writing that some of the sewer sale funds would be used to mitigate against rate increases over and above the promised rate cap.  That never came to pass.  The full story is told here (LINK).

Other Odds & Ends

Opposing privatization of your system (LINK).  Act early! 

About us (LINK).

Chester Water Authority (CWA) - This is our water supplier in New Garden Township.  It is the target of a privatization attempt by Aqua Pennsylvania.  We like CWA the way it is.  Here is some background on the takeover attempt: (LINK)

Links to other useful websites (LINK). 

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