Clean Water Current

NACWA Registers Concern as Pennsylvania Legislature Considers Measure to Encourage Utility Privatization

Sep 21, 2022

As the Pennsylvania Legislature continues to consider legislation that could unfairly make privatization of public utilities in the state easier, NACWA weighed in this week on behalf of its Pennsylvania utility members in a letter to state lawmakers.

The legislation, the Water Quality Accountability Act (SB 597), passed the state Senate earlier this year and would mandate adoption of an asset management plan model for public utilities in the state. While it is being promoted as a tool to increase economic and consumer protection, SB 597 would establish new, expensive and highly technical unfunded regulatory mandates with which many public wastewater utilities will knowingly struggle to comply. Utilities out of compliance with asset management plan reporting requirements would then be made vulnerable to private sector acquisition. It is being aggressively promoted by private utility interests in the state.

NACWA has previously published a statement on utility governance that recognizes the role investor-owned utilities can play in the broader water sector and that – in certain circumstances – private utility ownership may be the right choice for a particular utility and community.  However, the statement also makes clear that the playing field in these complicated discussions must not be unfairly tilted in favor of any particular solution.  The Association believes that the Pennsylvania legislation crosses this boundary and gives private utilities a disproportionate advantage in the governance discussion. 

Pennsylvania is not the only state facing these issues – there have been several recent attempts to encourage water utility privatization in other states. Last year, the New Jersey legislature considered the “Retirement Infrastructure Collateralized Holdings Fund Act" (the “RICH Act”). The proposed bill would have put New Jersey communities in an untenable position where they had an impractical 120 days to respond with remedial action to any needed and identified capital or operational improvement or risk the threat of privatization. 

Fortunately, after considering the concerns of groups including NACWA, the New Jersey legislature ultimately opted not to pass the RICH Act. NACWA strongly encourages the Pennsylvania Legislature to follow suit by ceasing further consideration of SB 597. 

If you believe your state may be considering a legislative and/or regulatory measure to unfairly encourage privatization, please reach out to Danielle Cloutier, NACWA’s Director of Legislative Affairs.

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