A bill being introduced Monday in the Pennsylvania House of Representatives would require ratepayers served by the Chester Water Authority (CWA) to approve any sale of the utility.
The sale of the CWA has been a political football over several years, but the discussion has been amplified in recent months due to plunging government revenues for the City of Chester caused by the coronavirus shutdown.
Gov. Tom Wolf’s subsequent declaration of a fiscal emergency for the city suggested that the sale of the CWA could generate funds to alleviate some of the city’s hardship, but the water authority disputes the idea that the city has any ownership at all.
“This bill is about consumer protection and giving a voice to people most impacted by any proposed utility sale,” the bill’s sponsor Rep. John Lawrence (R-Chester County), said in a news release.
“Chester Water Authority provides great water at a reasonable price to ratepayers across southern Chester and Delaware counties. My bill would require the Public Utilities Commission (PUC) to abide by the results of a customer referendum in any decision surrounding the sale of a public utility, including any proposed sale of CWA.”
The City of Chester’s troubled finances date back to at least to 1995, when it was placed under “Act 47” financial supervision by the state. However, the coronavirus economic shutdown hit the city hard, especially with the loss of taxes from Harrah’s casino, estimated to bring in about $15 million annually to the city’s revenues.
In mid-April, Wolf used “Act 47” again, but this time upped the ante by declaring a fiscal emergency, thereby giving the state broader powers than before. In the declaration, Wolf referred to the CWA as an “asset” of the city, which then set off a new power struggle.
Lawrence and fellow Republican Bryan Cutler (Lancaster County) shot off a reply letter to Wolf telling him the sale of CWA “would be a gross abuse of power under any circumstance.”
The CWA’s attorney, Frank Catania, began sending a series of emails to lawmakers in the service area, arguing that the push to sell the utility was the product of a “manufactured financial crisis.”
Ratepayers to CWA are not a pure overlap of the citizens of the city, however. The CWA’s customer base extends further west of the city, as well as south into parts of Chester County.
In 2017, Aqua America offered to buy the CWA for a reported price tag of $320 million, along with an agreement that rates would be frozen for a decade. The water authority rejected the deal.
CWA solicitor Frank Catania told Delaware Valley Journal he is happy for the bill, and says the ratepayers should be happy as well.
“The City of Chester never put any money into the authority,” Catania said. “All the money that built the authority and its infrastructure came from the ratepayers from the very first day of its operation. So I think that Rep. Lawrence’s bill will help underscore that, and I hope that the legislature gives it favorable consideration.”
The city, meanwhile, has launched a website — chesterwaterproposal.com — to keep citizens posted on developments.
“Now more than ever we need a path to solvency,” Chester Mayor Thaddeus Kirkland says on the website. “And that path, if it involves a deal for the CWA assets, must include responsible and safe water quality, quality employment protections for our workers, and fairness to our ratepayers.”
Kirkland also makes a vigorous argument for the city’s ownership of the CWA at the website.
To counter that, the homepage of the CWA keeps its own running estimate of the money it says CWA ratepayers have saved since the 2017 Aqua offer was refused: about $127 million.
Cutler, who co-authored the letter with Lawrence to Wolf slamming the proposed sale of the CWA, appears to be in line as the next speaker of the House of Representatives.
Lawrence’s bill, then, already has a powerful ally.
