By: Noah Eastman*
Abstract
People take water and wastewater service for granted because pipes are hidden underground, and treatment plants are seldom an important feature of communities. However, awareness of these resources—fundamental for life and public health—is certain when the monthly utility bill arrives. For many Pennsylvanian consumers, these bills continue increasing. Since 2016, the Pennsylvania Public Utility Commission (the “Commission”) will approve a private utility’s purchase of a municipal utility and allow recovery of the entire fair market value of the acquired utility through customer rates upon a finding of an “affirmative public benefit.” In weighing the advantages and disadvantages of acquisitions, the Commission has rarely determined that an acquisition did not provide a public benefit, even when large revenue deficiencies manifested.
In 2022, the Commission approved the acquisition of the East Whiteland Township wastewater system after finding an affirmative public benefit. However, the Commonwealth Court reversed the acquisition’s approval in Cicero v. Pennsylvania Public Utility Commission, holding that the Commission misapplied the law. Cicero changed how the Commission must analyze the facts in public benefit determinations. After Cicero, the Commission still approved the acquisition of the Butler Area Sewer Authority by erroneously identifying a public benefit in the transaction.
Cicero and the acquisition of the Butler sewer system highlight the glaring need for changes to the law. Municipal system acquisitions should not come at enormous costs to customers across the state. Therefore, the Pennsylvania legislature should either (1) create a customer veto power and a rate base inclusion cap to limit the harms of the current regime or (2) fully repeal section 1329 and investigate alternatives to narrowly tailor the law toward its defined objectives.
* J.D. Candidate, The Pennsylvania State University School of Law, 2025. The author wishes to thank his wife and son for keeping him grounded throughout the adventure of law school with their unending love and support.