By Christopher Franklin, chairman and CEO of Aqua America Inc.
Note: This piece first appeared in the Delaware County Daily Times.
The DELCORA board and management team made an important decision this week to put their customers first, when they announced the combination of Aqua and DELCORA. By combining with Aqua to address the large capital costs they are facing, they will save their average customer approximately $1,400 over the next decade when compared to remaining independent.
During that time, the combined company will redirect its waste stream from a plant owned by the Philadelphia Water Department to a plant owned by DELCORA in Chester that will be enlarged. This will avoid massive costs from Philadelphia.
Commendably, by combining with Aqua, DELCORA also retained all 136 employees, who will continue to enjoy the same compensation and benefits they enjoy today with added opportunities for growth as new employees of Aqua.
I want our current and future customers to know that Aqua has always been and remains committed to providing water and wastewater service at a reasonable price. We are fortunate to live in a region with plentiful, high-quality, protected water sources and reservoirs. However, we also live in one of the oldest areas in the U.S. Over the past several decades, we have spent considerably to renew our water and wastewater plants, pipes and equipment, while keeping our operating expenses low compared to other utilities. In fact, the majority of our rate requests are a direct result of our capital improvements. The work we’ve done to control the costs of some of our largest operating expenses, like power and chemicals, has been very successful.
Much of the success of controlling rates in the utility world is based on economies of scale, which in this case is spreading large capital costs like replacing mains and building plants over many customers in order to keep costs reasonable for everyone.
The water industry is ripe to benefit from economies of scale. No one would think it’s a good idea to have hundreds of small electric utilities across the country – there are roughly 35 electric utilities in the entire U.S. Conversely, there are nearly 2,500 water and wastewater utilities in Pennsylvania alone. There is a reason that most public utility commissions and environmental protection agencies promote the consolidation of water and wastewater utilities. It allows economies of scale to work and enables a concentration of expertise to avoid mistakes and address problems when they occur.
I would be remiss if I didn’t mention politics, which plays an important role in our democracy by providing an opportunity for candidates to talk to the public about what they stand for and what they hope to accomplish. This can be “messy,” but our republic would not exist without the political process. Aqua has thousands of employees with diverse beliefs and political views. The company operates in a non-partisan fashion, working with Republicans and Democrats to solve infrastructure and financial challenges to benefit their constituents and our customers.
In the process of combining DELCORA and Aqua, some will talk about politics, and others will have their own theories about the acquisition process. Importantly, we have worked together with DELCORA to consider the impact to customers, engineering challenges, employee matters and other business and operating issues. Never once, in all our discussions about combining these utilities, did we discuss politics, party affiliation or elections. The employees of both companies, like so many in Delaware County, go to work every day to provide an important service to their customers and carry out their work with diligence and without ever considering political affiliation.
Aqua was born in Delaware County, has proudly employed Delaware Countians and has served Delaware County customers for more than 133 years. Together with the DELCORA team, we plan to continue providing high-quality essential services at a reasonable price for many more years to come. We will also continue to support the community through our volunteer work and philanthropic foundation. We are grateful for your continued partnership. Thank you.
Christopher Franklin is chairman and CEO of Aqua America Inc.