A Tale of Two “Advocates”

Water and sewer ratepayers in East Whiteland Township were just saved from a projected double-digit rate increase. On the other hand, on September 1st this year, Philadelphia water and sewer ratepayers are burdened with a third consecutive rate hike, with a fourth rate increase going into effect in September 2024. The total size of the rate increases for Philadelphians is over 40%. The increases granted by the Philadelphia Water and Sewer Rate Board are, according to the Rate Board’s web page, “intended to generate additional first-year revenues of approximately $80.41 million above current rates in FY 2024 and total additional revenues of approximately $162.131 million above current rates in FY 2025”

Why are East Whiteland Township consumers protected and Philadelphia rate payers saddled with massive rate increases? Both systems are older, and both need upgrades. The percentage of low-income families is higher in Philadelphia than in East Whiteland. But that has been the case for decades, and there is no explanation for why consumers in East Whiteland are being protected against rate hikes and Philadelphia consumers are not.

The most glaring difference between the consumer classes is how the consumer’s “Public Advocate” is appointed and who the “Public Advocate” serves. Outside of Philadelphia, water and sewer consumers are represented by the State Public Advocate. The State’s Attorney General, an elected official, appointed the State’s consumer advocate. The State Advocate is required to be confirmed by the Pennsylvania Senate. The regulatory body, the Pennsylvania Public Utility Commission (PA PUC), has no control over the hiring and/or dismissal of Pennsylvania’s Consumer Advocate.

In Philadelphia, it’s a different story. Philadelphia’s “Public Advocate” is appointed by the rate-making body, the Philadelphia Water Rate Board, not elected officials. The Water Rate Board has the power to and does, when it is happy with what the “public advocate” does, re-appointed Philadelphia’s Public Advocate to another no-bid contract.

The State Consumer Advocate serves the public; the City’s public advocate can only be removed by the Water Rate Board, meaning it serves at the Board’s pleasure.

An example of just how important it is to consumers to have its public advocate answer to the public and not the rate-setting Board is highlighted by the Philadelphia Inquirer’s August 17th editorial. The Pennsylvania Public Utility Commission, the regulatory body, approved the sale of East Whiteland’s sewer system to Aqua PA. Similar sales of public water utilities to private stockholder-owned utilities in Pennsylvania have led to massive rate increases. In Limerick Township, the rates went up 98%, in New Garden Township, 90% in East Norriton, 73% and 69% in Cheltenham. The State’s Consumer Advocate, who doesn’t answer to the regulatory body, the PA PUC, challenged the sewer system sale in court, saying it was not in the consumer’s interest, and won.

Contrast that with Philadelphia’s public advocate, who answers directly to the regulatory body, the Philadelphia Water Rate Board. The Rate Board failed to require Philadelphia Water Department to combine services with the City’s other municipal utility, the Philadelphia Gas Works, to cut costs, failed to require the water department to seek cost savings and efficiencies before granting a rate increase, allowed the Philadelphia Water Department to increase its cash surplus and did not hold the water department responsible for the Water Department’s failure to secure funding from the Federal American Recovery Plan Act. The Philadelphia Consumer Advocate, which received two no-bid contract renewals, did not challenge the rate-making Board’s decision.

The State Consumer Advocate, who did not have to consider if the PA PUC approved of his actions or fear that the contract would not be renewed, was able to challenge the rate increase and win. The Philadelphia Public Advocate, who could only receive contract renewals from the regulatory body, the Philadelphia Water Rate Board, went along with the four consecutive rate hikes.

Philadelphia’s public advocate did go to court, but they went to court to defend the rate hikes, not fight against them.

The difference between who the two advocates answer to maybe why Philadelphia Water Ratepayers are seeing four consecutive rate hikes and East Whiteland Township consumers were protected from the projected price gouging.

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