The state Public Utilities Commission has denied a petition from Delaware County to rescind a conditional acceptance of Aqua Pennsylvania Wastewater Inc.’s petition to acquire the assets of the Delaware County Regional Water Quality Control Authority.
The PUC found that a factual question exists as to whether a “rate stabilization plan” exists as part of the transaction and that it would be premature – and possibly violative of due process – to rule on that issue without a full evidentiary record, according to the order issued last week.
“DELCORA applauds the Pennsylvania Utility Commission’s decision today to deny Delaware County Council’s effort to delay the PUC’s consideration of the sale of DELCORA,” said the authority’s executive director, Robert J. Willert, in a statement. “This decision is a victory for ratepayers. Unfortunately, the Delaware County Council continues to pursue strategies which will dramatically drive up ratepayers’ rates and raid the assets which belong to ratepayers. The DELCORA plan allows for the mandated capital and maintenance improvements while keeping rates at a manageable 3% annual increase, rather than the projected 10% annual increases if nothing is done.”
“While recognizing the county’s observation that Aqua has not provided sufficient documentation of the rate stabilization plan, the Commission found these issues should be addressed at hearings before the Administrative Law Judge assigned to the proceeding,” said county Solicitor Bill Martin. “The commission additionally clarified that a separate request by the county – to postpone further PUC review until resolution of related issues pending at the Delaware County Court of Common Pleas – remains under consideration.”
Aqua filed its application in March requesting the issuance of an order and certificates of public convenience approving a proposed $276.5 million merger with DELCORA that would be used to pay off outstanding debt and fund a trust to be used as a “rate stabilization plan” that keeps annual increases pegged at 3% annually until the fund is exhausted.
The Democrat-controlled county council has been fighting the merger on several fronts, arguing the sale approved last year was a backroom deal pushed by a Republican-led prior administration to benefit GOP donors.
The commission conditionally approved Aqua’s application in June, but requested additional supplemental materials. The commission issued a second letter in July indicating those requirements had been met and the application was complete.
The county, meanwhile, sought an amended letter from the PUC requiring information on the rate stabilization plan as part of Aqua’s petition. Aqua argued in response that it is not proposing “a rate stabilization plan” as recognized under the Public Utility Code because it does not intend to hold rates constant or phase in new rates over time.
Rather, the company says the proceeds of the sale would go into a trust that will be drawn upon as a “customer assistance payment” and will have no impact on Aqua’s jurisdictional tariff rates.
The county argued in response that Aqua was trying to dodge the issue by misapplying the term “rate” as being limited only to tariff rates and that the plan to limit post-acquisition rates to 3% “falls squarely within the statutory definition of a rate stabilization plan to phase rates in over a period of time after the next base rate increase.”
But Aqua contended that a “rate” in the code is a charge “made, demanded, or received for any service,” while this would be a payment made from an unregulated third party to offset charges made by Aqua for wastewater service.
Aqua additionally noted that it provided responses to the Office of the Consumer Advocate and Bureau of Investigation and Enforcement regarding details about the consumer assistant payment, including a sample bill showing how the assistance was calculated, which had also been provided to the county.
The order notes the Commission’s Bureau of Technical Utility Services found Aqua had satisfied an “application checklist,” but it was not tasked with determining the merits of the application. Upon review, there was no basis for TUS to determine that Aqua’s response denying there is a rate stabilization plan lacked good faith, according to the order.
However, the PUC found that the county and Aqua have presented a factual dispute about the existence of such a plan and whether it is applicable to the application. The PUC disagreed with the county’s position that considering Aqua’s petition at this point is a violation of due process, however, and that it is actually protecting due process by moving forward and guaranteeing a hearing on the factual dispute before the Administrative Law Judge assigned to the proceeding.
The order notes that the county also filed a petition to stay in August, which will be addressed in a separate opinion and order. The next hearing date in the Common Pleas case is meanwhile scheduled for Sept. 9 before Judge Barry Dozor.
The PUC on Monday also issued a separate order granting a motion from the OCA to extend the statutory deadline for a decision on the completed application to March 26, 2021.