They say you can’t fight city hall.
That might also be true about a big utility company—unless you also have deep pockets or a passionate and knowledgeable advocate willing to work pro bono.
New Garden Township resident Bill Ferguson has the latter.
Lawyer James Cawley, who formerly served as a commissioner on the Public Utility Commission and was semi-retired, renewed his law license to fight a PUC ruling he deemed unjust in a case brought by Ferguson against Aqua Pennsylvania. Cawley declined to comment for this article about the case now pending in Commonwealth Court.
Ferguson says that when Aqua bought the sewer system from New Garden Township in 2021 for $29.5 million, the township was paying to truck sewage from one plant to another. But within a few months, Aqua engineers discovered a pipeline that could be used to transport the sewage and stopped paying to truck it away.
However, the company did not disclose that in its 2021 rate increase filing with the PUC, Ferguson contends. In his appeal, he notes that Aqua referred to the trucking charge as “purchased wastewater expense,” which he found to be “opaque.”
“In their filing, Aqua had an obligation to be truthful,” said Ferguson. “And eliminating the trucking expense certainly falls under the requirement (to report) that they should have fulfilled. But they didn’t.”
So, New Garden residents have been paying $1.2 million a year—or $3.3 million so far—to Aqua for the unnecessary trucking fee, the appeal said.
The PUC dismissed the case under a law against “retroactive ratemaking.”
Ferguson, co-founder of Keep Water Affordable, who was representing himself at the time, said he made the case to an administrative law judge and then to the PUC that Aqua could set a lower rate, but instead included the trucking fee.
“They weren’t trucking the water,” said Ferguson. “We didn’t know that until the board of supervisors was forced to hold a meeting to explain to their residents why their sewer bills went up so dramatically. Our bills doubled. And we were as unhappy as can be.”
At that meeting, Aqua’s operations manager gave a presentation “where he literally bragged about how Aqua moved to activate this pipeline and how efficient they were,” said Ferguson. “This was about six to eight months after they bought the sewer system. They had until January 2022 to make adjustments to their rate increase filing, but the trucking fee remains.”
New Garden residents were hit with the new fees in May 2022.
The trucking cost equaled 47 percent of the rate increase, said Ferguson.
“With the dismissal, the PUC is saying an approved rate increase cannot be challenged,” said Pete Mrozinski, co-founder of Keep Water Affordable. “It raises the question, does any ‘misbehavior’ reach a threshold for the PUC to take any action? This opens the door to abuse by utility companies.”
Under township ownership, in 2014, a resident with a typical 4,000-gallon outflow paid $168 per quarter. When township officials were negotiating the sale in March 2021, that same owner paid $219 quarterly to the township. Once Aqua completed the purchase and set its first rate in May 2022, the homeowner’s bill jumped to $415 a quarter. However, a separate PUC appeal lowered rates somewhat, said Ferguson.
Ferguson noted that when New Garden Township owned the sewers, no profits were involved. Now, “the first 44 cents of every dollar goes to pretax profits,” said Ferguson, since Aqua is a private company, part of Essential Utilities.
Act 12, a 2016 law, opened the floodgates for private companies to buy Pennsylvania water and sewer systems. Ferguson said because Aqua Pennsylvania and Pennsylvania American Water—the two biggest utility purchasers—have powerful lobbies in Harrisburg, the law is unlikely to change anytime soon, unless more constituents complain to their lawmakers.
“We have no comment on the ongoing litigation,” said a spokesperson for Aqua Pennsylvania.
Comments are closed.