In yet another setback for the mega utility company, an administrative law judge with the Pennsylvania Public Utility Commission has ordered a stay on Aqua Pennsylvania Wastewater’s application to purchase the Delaware County Regional Water Quality Control Authority (DELCORA).

“[P]ursuant to the ordering paragraphs below, the Application will be stayed pending final unappealable decisions by: (1) the Bankruptcy Court for the Eastern District of Pennsylvania on the Motion to Enforce Stay; and (2) the Delaware County Court of Common Pleas on DELCORA’s Complaint for Declaratory Judgement [sic],” wrote administrative law judge F. Joseph Brady.

And, he added, “The simple fact of the matter is we cannot recommend that a contract between two parties is in the public interest if the terms of the contract remain unsettled.”

The sale has become ensnared in the chaos of the City of Chester’s financial crisis, with the city arguing it has a claim on the value of the massive wastewater treatment system. The city has filed for bankruptcy in the wake of decades of mismanagement and corruption, and its finances are now overseen by state-appointed receiver Michael Doweary.

At the same time, DELCORA customers like Energy Transfer oppose the sale, fearing a rate increase. He summarized their legal arguments in the case. “The DELCORA Complaint injects uncertainty and hypothetical scenarios into Aqua’s Application that goes to the core of the proposed transaction – whether the Seller has the legal right to consummate the material transactions of the Application, including the right to sell assets, and the right to establish a Trust,” the judge wrote. “Energy Transfer argues that this uncertainty will not be dispelled until a final unappealable judicial declaration is issued.”

For the nearly half a million customers across 46 municipalities in Chester and Delaware Counties, the top concern is the cost of their wastewater treatment and potential hikes in the sewer bills. Some Delaware Valley communities who have sold their public utilities to Aqua now have unhappy citizens protesting the move.

Margo Woodacre is a co-founder of KWA – Keep Water Affordable, a group of New Garden, Pa. residents who have seen their sewer bills soar since Aqua purchased the municipal system. She said Aqua came in with a promise of a two-year rate freeze and a cap on rate increases for 10 years. It was a promise Aqua hasn’t kept, she told DVJournal last year.

“Aqua is a lot of talk,” Woodacre said. “They’ve got the money, they’ve got the connections, but I wouldn’t believe anything they say.”

Judge Brady noted it is the inability of the parties to agree on the basics of the Asset Purchase Agreement (APA) or the meaning of previous rulings that brought the issue to the PUC. And, he said it was the wrong forum to resolve such contentious issues.

“It is clear the two essential parties to the Application proceeding have a difference of opinion on the meaning of the Commonwealth Court’s Opinion and its effect on the very APA and Trust that the Commission is being tasked with determining are in the public interest or not,” Brady wrote. “The Commission is not the proper forum to decide whose interpretation is correct. Not granting a stay would be akin to choosing Aqua’s interpretation over DELCORA’s interpretation, which I will not do.

“I do not see how it is possible to determine if a contract is in the public interest if the two principals of the contract, the Seller and Buyer, do not even agree on what that contract says or means.”

As a result, the PUC won’t allow the purchase to go forward until there are “final unappealable” rulings in both the Chester bankruptcy case and the Court of Common Pleas case of DELCORA’s request for a declaratory judgment.

The ruling can be read in its entirety here.


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