PA Public Utility Commission Votes To Suspend, Investigate Aqua Proposed Water Rate Hike

PENNSYLVANIA — State regulators last week voted to suspend and investigate a proposed water rate hike by Aqua Pennsylvania which would have led to a significant increase on monthly water bills.

The Pennsylvania Public Utility Commission voted 3-0 on Oct. 7 to investigate the water and wastewater increases requested by Aqua, a private water company that has during the past number of years been acquiring territory throughout the Philadelphia suburbs and beyond.

Aqua Water and Aqua Wastewater had sought to increase its annual operating revenues for water services by approximately $86.118 million, or 16.9 percent, and it sought a corresponding increase in its annual operating revenues for wastewater services by $11.566 million, or 31.2 percent, according to the Public Utility Commission.

Under the rate hikes, the average monthly bill for a residential water customer using 4,000 gallons of water per month would increase by $11.97, or 17.3 percent, from $69.35 to $81.32. The average monthly bill for a residential wastewater customer would increase $18.44 or 33.2 percent, from $55.51 to $73.95, according to the PUC.

In its vote last week, the PUC said the rate increase requests would be suspended for up to seven months and would be assigned to the Office of Administrative Law Judge for evidentiary hearings and the issuance of recommended decisions or settlements, the PUC stated.

Aqua's earlier announcement regarding its proposed rate hikes had rankled some in the communities it serves, with customers complaining about the amount of the proposed increases, especially in a time of economic hardship for many brought on by a global pandemic.

Some state officials also called for an investigation into the water company's requests.

State Sen. Katie Muth, D-44, had sent a letter to the PUC prior to its vote that she made available online.

In the letter, addressed to PUC Secretary Rosemary Chiavetta, Muth said her office had received "many communications" from constituents expressing concern over the proposed rate hikes.

"Throughout Aqua's service territory, ratepayers are still firmly in the grip of the COVID-19 pandemic and the ravages of Tropical Storm Ida and the impacts to the health of the citizenry and to the local and regional economy are devastating," Muth wrote.

"Aqua is not in need of immediate rate relief," Muth continued. "The company’s current and near-term financial outlook is stable, and the utility has sufficient revenues to continue to provide safe and reasonable service, to continue its construction activities, pay all of its expenses and earn a reasonable profit."

Muth stated that in its most recent report filed with the PUC, Aqua reported making net income of $188 million last year on $509 million of operating revenue. The combined rate increase Aqua is currently seeking would raise the company's annual revenue by an additional $98 million, or about 18 percent.

"It is both unjust and unreasonable to raise rates on essential water and wastewater service as the economic impact of the COVID-19 pandemic continues to unfold in unpredictable and uncertain ways," Muth wrote. "The pandemic has taken an especially heavy toll on both the economic and public health of low-income and minority households, which already faced disproportionately high energy costs compared to higher income households before the pandemic. Raising rates on utility rates would compound the already high rates of involuntary termination and exacerbate the disproportionate health impacts of the pandemic on low-income communities and communities of color and prolonging the longer-term economic recovery for these same households."

According to Aqua, the company provides water service to over 434,000 customers in more than 200 municipalities throughout 32 of Pennsylvania's 67 counties. And it provides wastewater services to more than 40,000 customers in more than 40 municipalities across 15 counties. In total, it serves around $1.5 million Pennsylvanians.

The company is very heavily concentrated in the Philadelphia suburbs, where it was formally known as Philadelphia Suburban Water.

According to a 2018 article in the Philadelphia Inquirer, Aqua was one of the companies that took advantage of a 2016 Pennsylvania law, originally known as Act 12, that encouraged the privatization of municipal water systems.