Tuesday, November 21, 2017

Legislation Requiring PUC Oversight Of Pittsburgh Water Authority Headed To Governor’s Desk

Legislation-- House Bill 1490-- to place the Pittsburgh Water Authority under the oversight of the Public Utility Commission is on its way to the governor’s desk after being passed in the House Monday for the final time, said House Speaker Mike Turzai (R-Allegheny) and Rep. Harry Readshaw (D-Allegheny).
Over the last year, local and national newspapers have recounted many service issues facing PWSA. They include multi-million dollar debt and uncollectible accounts, unmetered accounts, incorrect billing, system leaks, and thousands of lead service lines, many of which have not been identified or located.
Most recently, they have been cited with non-compliance by the U.S. Environmental Protection Agency for Clean Water Act violations. These issues call into serious question the sustainability of PWSA and the health and safety of those served by the system.
“The Pittsburgh Water and Sewer Authority has been grossly mismanaged,” said Rep. Turzai.  “The state had to step in.  Working in a bipartisan fashion with my good friend, Rep. Harry Readshaw, we knew something needed to be done.  We developed a solution that will provide more oversight, ensure fiscal responsibility and demand best practices.  The authority needs to be held to the same standards as the private sector.”
“This legislation is about consumer protection and the health and safety of those served by the Pittsburgh Water and Sewer Authority,” said Rep. Readshaw. “This is really a commonsense approach that will move the system in a positive direction.”
A consultant’s report issued in August by Infrastructure Management Group called the PWSA “a failed organization atop a dangerous and crumbling structure.”  The report noted a dysfunctional culture at the authority and exposed the fact that about 20 percent of PWSA’s 250 employees are out of work on short-term disability.
In addition, a recent performance audit released by the state auditor general’s office highlighted several of the deficiencies with the PWSA’s operation.  They include:
-- Under a 1995 agreement with the city, the PWSA is required to provide 600 million gallons of free water each year.  However, the PWSA does not track how much water the city uses annually because many city-owned properties are not metered.
-- Between 2012 and 2016, PWSA’s financial position went from a positive balance of $7.7 million to a negative balance of $15.7 million.
-- As of Dec. 31, 2016, PWSA has a debt load of $842.5 million, which has grown by $43.2 million since Dec. 31, 2012.
-- PWSA is not able to bill for approximately 50 percent of clean water its system produces due to leaky pipes and unbilled accounts.
-- Since 2014, four individuals have served as executive director.
-- Billing irregularities frequently occur, including a complete lack of billing for thousands of customers for a period of several months arising from changes in PWSA’s billing system and the installation of new meters.
Rep. Turzai said PUC oversight is crucial to correcting the authority’s long-standing difficulties. The PUC has the power to demand sound financial practices, systemic upgrades to infrastructure and reliable service delivery to customers.
A House Fiscal Note and summary is available.
Gov. Wolf is expected to sign the legislation into law.
PUC Commitment To Customers
“We appreciate the unique nature of the situation involving the Pittsburgh Water and Sewer Authority, and understand that interacting with the PUC is going to be a new process – for PWSA staff, for local and state leaders, and for Pittsburgh area residents,” said PUC Chairman Gladys M. Brown. “The challenges facing PWSA are complex and will require the involvement of all stakeholders. For our part, the PUC is committed to addressing these issues in a transparent manner, working to ensure an open flow of information to the families, businesses and institutions who depend on these services.”
With the approval of this legislation, the Commission can now move forward with an implementation process for assuming jurisdiction over PWSA – which will be adopted at a future PUC public meeting. This will detail the process for PUC consideration of rates and tariffs; infrastructure improvement plans; billing and customer service issues; and other applicable regulations.
Under the legislation, the PUC will begin accepting complaints from PWSA customers on April 1, 2018. The Commission is in the process of training staff and making other necessary preparations to handle those complaints. Until April 1st, customers with complaints should continue to contact the PWSA customer service center, at 412-255-2423.
“The Commission has extensive experience with water and wastewater utilities across the state – ranging in size from a few dozen customers to more than 600,000,” Chairman Brown noted. “Over the years we have worked with many ‘troubled’ systems, which has taught us that there are no instant or magic solutions. It will require time, hard work and a shared commitment to developing and implementing the plans that will move Pittsburgh forward.”
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