Pa. House panel revisits utility privatization law as consumers face soaring water and sewer bills
Water and sewer bills for thousands of Pennsylvania consumers have soared by triple digits since a 2016 law changed the way municipal utilities are valued when for-profit companies buy them, a state House panel heard recently.
The law allows municipal water and sewer utilities to negotiate with for-profit utilities for the fair market value rather than the actual value of the system. The higher purchase prices, in turn, give new owners a basis to seek approval to charge higher rates, which they usually receive, consumer advocates testified.
The result, state Consumer Advocate Patrick Cicero said, is that customers of public water and sewer utilities acquired by for-profit companies since the law took effect pay about $85 million more annually for service that they otherwise would.
Investor-owned companies, such as Aqua PA and Pennsylvania American Water, have purchased 22 municipal utilities under the new valuation method and won rate increases ranging from 44% to 166%, according to the Pennsylvania Public Utilities Commission.