Today, the Pennsylvania House Committee on Consumer Protection, Technology and Utilities approved a package of legislation from Rep. Rob Matzie to reform the water system privatization process under Act 12 of 2016. The 2016 law authorized inflated system acquisition prices and led to dramatic increases in water and sewer bills for Pennsylvanians served by large water corporations.  

The four bill package (HB 1862, HB 1863, HB 1864, and HB 1865) will improve public notices, require public bidding, provide more time for the regulatory review process, and spread out the rate impact of inflated purchase prices over several years. 

Most importantly, HB 1865 will cap the amount of a purchase price that can be recovered through rates at 125 percent of the system’s depreciated original cost. An analysis from the customer advocate’s office found the 2016 law has doubled the cost of the 21 systems acquired under its new valuation process. As a result, customers are paying an extra $85 million each and every year. In absence of action, this burden on customers will dramatically escalate over time as the corporate acquisition spree continues. 

Advocates continue to call for a full repeal of Act 12 of 2016. HB 627 from Rep. John Lawrence was introduced last year to repeal the law, but it has not been brought up for a vote in the Committee. 

“We applaud the Committee for passing the Act 12 reform package, as the bills are a good step forward and would make meaningful changes to help mitigate the harm of these privatization schemes,” said Ginny Marcille-Kerslake, Eastern Pennsylvania Organizer for Food & Water Watch. “We urge the full House to pass this bill package. Ultimately, more is necessary. Pennsylvanians need a full repeal of the terrible Act 12 of 2016 to end predatory water system pricing.”

“I’d like to thank the Committee for negating some of the harms of the predatory pricing scheme enabled by Act 12 of 2016 by passing this bill package but I want to reiterate that Act 12 needs to be repealed,” said Kofi Osei, Towamencin Township Supervisor and Neighbors Opposing Privatization Efforts(NOPE) organizer. “Doubling or tripling utility rates for the sake of shareholders is not good governance and local officials should not have the option.” 

The Act 12 Reform Package moves to the House floor for approval.