Aqua, borough challenge judge’s recommended denial of free water service to fire companies
KAYLEE LINDENMUTH / SHENANDOAH SENTINEL FILE - The Polish American Fire Co. in Shenandoah is seen in 2021.
SHENANDOAH – An administrative law judge’s allegation that providing free water service to volunteer fire companies is an “unreasonable preference or advantage” is being challenged by both Aqua and Shenandoah.
Administrative Law Judge Jeffrey Watson handed down his recommended decision regarding Shenandoah’s sale of its water authority to Aqua, one of the largest private water companies in the country, earlier this month.
The $12 Million sale has been working its way through regulatory red tape before the Pennsylvania Public Utilities Commission for the past year. The matter still needs to be approved by the PUC later this summer.
In his decision approval of the sale, Watson stipulated that the provision for free water service to the five volunteer Shenandoah fire companies, two volunteer West Mahanoy Township fire companies, and Shenandoah Ambulance be denied, claiming such service is “unreasonably preferential.”
Each entity would receive free service until Aqua’s next rate case, at which point the MABS system’s rates would be brought in line with Aqua’s rates and the companies would be charged.
Watson noted that the Office of Consumer Advocate said “that, although other Aqua ratepayers are not at risk to subsidize the cost of serving the Fire Companies until new rates are established in a base rate case that includes the MABS system, existing customers and the other acquired customers will not benefit from the Fire Companies contributing revenues through the Distribution System Improvement Charge during that period.”
Locally, the Hazleton City Authority and the Mahanoy Township Authority both told the Sentinel that they charge fire companies in their service territories for water service. The Schuylkill County Municipal Authority said they only charge each fire company in their service area the minimum charge of $19.65 per month.
Tuesday, both Aqua and Shenandoah filed exceptions challenging the denial.
William C. Rhodes, counsel for Shenandoah, said in the borough’s filing that the companies would only receive free service for “a relatively short period of time.”
“Shenandoah asserts that continuing the long-standing practice of offering free water to the enumerated fire companies just until such time as meters can be installed and Aqua’s next rate case is approved does not constitute an ‘unreasonable preference or advantage,'” Rhodes wrote.
Rhodes said the companies “serve an essential public benefit to the residents of the Borough and customers of MABS.”
“They provide life-saving service to the general public; therefore, supplying them with the tools they require to provide this service is not unreasonable,” Rhodes wrote. “The fire companies rely on this practice and understood it would be preserved (at least in the short term) following the sale of the System to Aqua until such time as the Borough and the fire companies could agree on alternate arrangements.”
Both Shenandoah and Aqua contend that the denial is a violation of PUC regulations requiring a utility to adopt a tariff equal to the rates of the utility it is acquiring.
Courtney L. Schultz, counsel for Aqua, said in their filing that “the Commission has previously required and approved the exact same continuation of free service proposed here in a prior proceeding.”
She cited the purchase of the Cheltenham Township Sewer Authority in southeastern Pennsylvania, in which the PUC required Aqua to continue to provide free service to entities previously provided such service by the township.
All of those entities provided free service by Cheltenham were fire companies.
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