Judge recommends approval of MABS sale without free fire co. water; denies objections by Gawrylik
SHENANDOAH – The sale of Shenandoah’s water authority to one of the largest private water companies in the nation is another step closer to completion.
Administrative Law Judge Jeffrey A. Watson filed his recommended decision in the matter Thursday.
In the filing, Watson described the sale as being in the public interest, and both denied objections by ex-MABS Chair Donna Gawrylik and the sale’s provision that Aqua provide free water to Shenandoah area volunteer fire companies until the next rate case.
The sale must still be approved by the Pennsylvania Public Utilities Commission at a meeting in the summertime.
In a 6-1 vote in 2020, Shenandoah council approved the sale of the Municipal Authority of the Borough of Shenandoah (MABS) to Aqua, Pennsylvania, of Bryn Mawr, for $12 Million. The sale has seen vocal opposition since then, as it wades through bureaucratic red tape.
Watson said in the filing that the sale is in the public interest because “system customers will receive quality service from Aqua, a certificated public utility with the necessary financial, technical and legal resources to provide that service into the foreseeable future.
“Bringing the [MABS] existing customers into Aqua’s customer base will also ensure they will have access to the Commission’s procedures for investigating and enforcing any complaints that the residents may have regarding their service,” Watson wrote. “Additionally, future rate increases are subject to the Commission’s jurisdiction.”
Watson deflected oppositions based on potential rate increases, which Aqua said could be as high as 45%, because rate increases would be subject to PUC approval.
The judge also denied objections raised by Gawrylik that the public was not afforded due process in the sale, claiming her objections “were not supported by any record evidence,” and that some of the issues are beyond PUC’s jurisdiction. Watson, however, wrote that Gawrylik cited testimony specifically addressing her claims, including a borough resident addressing “the devastating effect that a sale to aqua would have on Borough of Shenandoah residents,” and a borough council member testifying that residents were not informed of their rights to sign a petition opposing the ordinance.
Watson also said that the public benefits from the sale because it “promotes the Commission’s policy favoring regionalization and consolidation of water and wastewater systems.”
“Further, Aqua plans to invest $23 million in the MABS system for main replacements and other system needs, [and] will endeavor to minimize future water losses through main replacements and other improvements,” Watson wrote.
“Aqua and the other Settling Parties have also introduced substantial record evidence to demonstrate that the transaction proposed in the Settlement, as modified, will provide affirmative public benefits,” Watson wrote. “The main benefit noted is that Aqua will ensure that Systems customers will receive high quality water service meeting all applicable regulatory requirements and customer service standards pursuant to the Code.”
Watson also 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.”
He 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.
Watson’s recommended decision must still be approved by the PUC.
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