Democrats want to reform a state law that opened privatization floodgates on local water and wastewater systems in Pennsylvania, saying the law has "run far afield" of its intent and that the resulting acquisitions have been poorly regulated, Spotlight PA's Stephen Caruso reports.

According to Fast Company, Act 12 of 2016 allows the price of Pennsylvania water and sewer systems to include market factors, not just assets like pipes and plants, driving up their value and providing short-term gains for cash-strapped municipalities and often higher consumer costs.

THE CONTEXT: Such "fair market value" legislation has been enacted in 15 states in the past decade. A 2022 study published in the journal Water Policy found that out of 500 of the nation’s biggest systems, private ownership was the most significant factor in driving up utility bills.

Activists are watching a case out of East Whiteland Township in Chester County, where the Commonwealth Court overturned a sewer sale that had already been approved by state regulators. If the ruling stands, Fast Company reports some activists think it "could help dismantle the privatization push by forcing regulators to acknowledge its toll on ratepayers."

Meanwhile, the Act 12 reform package floated by House Democrats "will still permit struggling systems to be acquired at the current levels" while also limiting acquisitions of healthy systems and providing regulators "with ample time to review these sales more thoroughly." Read the memo.