Judge issues opinion opposing BASA sale
An administrative law judge issued an recommendation Thursday, Sept. 14, that Butler Area Sewer Authority not be sold to Pennsylvania American Water.
The Pennsylvania Public Utility Commission assigned Administrative Law Judge Marta Guhl to review the BASA sale and issue a nonbinding recommendation. Thursday’s opinion took into account testimonies of BASA customers; claims made by PAWC, Butler and Butler Township; financial data of each entity; and projected outcomes of the acquisition.
Guhl wrote the cost to BASA customers is cause to not recommend the sale; and the settlement agreement reached between BASA, the water company, Butler and Butler Township should also be denied.
A joint statement from BASA, Butler and Butler Township said officials of each remain hopeful that the sale will still be approved by the PUC, despite the judge’s recommendation.
“This is merely a recommendation and just one step in a long process,” the statement said. “It does not change our resolve to move forward, considering that the overwhelming consensus among stakeholders is that this sale stands to benefit all parties involved, a sentiment that was reflected in the unanimous settlement agreement reached by those same parties during the hearing phase.”
Center Township and Summit Township previously filed objections to the sale, but withdrew once the parties involved in the sale reached a settlement agreement in August.
Michael Gallagher, solicitor for Center and Summit townships, told the Center Township supervisors Wednesday, Sept. 13, that Guhl was conducting her research around the sale while the townships were preparing their arguments. After reading the judge’s recommendation, Gallagher said both townships agree with her opinion.
“Supervisors of Center Township and Summit Township are pleased with the opinion,” Gallagher said. “They believe it is in the best interest of not only Center and Summit township residents, but all BASA customers.”
The joint settlement petition involved BASA; the city of Butler; Butler, Center and Summit townships; the water company; and the state offices of Consumer Advocate, Small Business Advocate and the Bureau of Investigation and Enforcement of the Pennsylvania Public Utility Commission, and was revealed Aug. 14.
The agreement brought the purchase agreement purchase price to $230 million from the initial $231.5 million. As part of the settlement agreement, the water company can recoup only $228 million through customer rates.
As part of the agreement, Pennsylvania American Water will contribute $3.5 million, or $700,000 annually over five years, to the company’s statewide hardship grant program, which helps low-income families pay overdue water and wastewater bills in emergencies. The company also will increase eligibility for hardship grants from 200% to 250% of Federal Poverty Income Guidelines.
Butler Mayor Bob Dandoy said the city is still cautiously optimistic on the sale of BASA.
“We’re disappointed by the judge’s recommendation,” Dandoy said. “We still believe this is a positive thing for BASA and the residents of all the communities.
“We’re still hopeful the PUC will see the value of what we’re trying to do with the sale.”
Gallagher said Guhl had filed a similar recommendation in a review of the sale of another municipal sewer authority to Pennsylvania American Water, which was issued at the end of July. While the Public Utility Commission reversed the opinion in that case, an appeal to the Commonwealth Court ended with a Commonwealth judge agreeing with Guhl’s opinion.
Gallagher said he is not sure of how the judge’s opinion in the BASA sale will affect the final decision by the PUC.
“Whichever way she goes, the question is, ‘Which way is the PUC going to go?’” Gallagher said. “Will it change anything? I don’t know, but it’s interesting how it came about.”
