The Municipal Authority of Robinson Township has filed a Petition for Interim Emergency Order before the Pennsylvania Public Utility Commission to stop Pennsylvania American Water Company from currently supplying water at a rate Robinson claims is "illegal."
According to Tony Lenze, executive director of The Municipal Authority of the Township of Robinson (MATR), "Until these legal issues have been resolved before the PUC, Pennsylvania American should not be supplying water at the deeply discounted rate that we have challenged before the PUC. We think that PA-American is usurping the authority of the PUC, the state entity created to regulate PA-American's conduct."
Robinson filed a lawsuit with the Public Utility Commission against foreign-owned Pennsylvania American Water last April. "We believe that their use of a 'rider' in the contract and deeply discounted pricing was in violation of state law and feel confident that we can prove it in a court of law," Lenze said. "Until this has been resolved, we have asked the PUC for an injunction to stop PA American from supplying water at that rate."
Robinson has been selling water to WACMA for North Fayette residents for the past 40 years and recently lost the contract to foreign-owned Pennsylvania-American Water Company because of what it terms "alleged illegal rate setting by PA-American."
A hearing has been scheduled by Public Utility Commission Administrative Law Judge Larry Gesoff for 10 a.m. on Tuesday, February 17, 2004 at the Pittsburgh State Office Building, 11th Floor. Judge Gesoff's reason for the hearing is "For the Commission to enter an order prohibiting Pennsylvania American Water Company from commencing service to Western Allegheny County Municipal Authority pursuant to the Pennsylvania American Water Company Agreement, or constructing any facilities with respect to such service."
PA-American, owned by German Energy conglomerate RWE and managed by UK- based subsidiary Thames Water, is heavily in debt because of the $7.6 billion acquisition of American Water Works, which owns PA-American and subsidiaries in 28 other states. "RWE is motivated to win as many contracts in the U.S. as possible to pay off its operating expenses," Lenze said. "This "sweetheart deal" will eventually lead to exorbitant rates for North Fayette residents. RWE is clearly operating in the best interests of its shareholders and not in the public interest. And a fundamental question for North Fayette residents is, do they want a German company controlling their water supply," he said.
Lenze pointed out that PA-American, which provides water service in 35 counties in the state, requested a $64 million (18.2 percent) rate hike this year. That rate hike is currently under review by the Public Utility Commission. "PA-American rates in Pennsylvania are already 40 percent higher than rates of other government-owned water providers in the Pittsburgh area, like Robinson," Lenze said.