Advocates for overturning the sale of the Towamencin Municipal Sewer System scored a victory at the polls on Tuesday with the passage of a Home Rule Charter, but a potentially larger battle looms on the horizon as Pennsylvania American Water (PAAW) has signaled they have no intention of backing out of the deal.
“We signed an agreement with Towamencin Township to purchase their sewer system, and we plan to uphold that commitment,” said Kara Rahn, Senior Manager of Government and External Affairs for PAAW, in response to questions from North Penn Now. “We subsequently filed an application with the Pennsylvania Public Utility Commission for approval of the acquisition, and we plan to continue proceeding through the regulatory review and approval process.”
Prior to the passage of the Home Rule Charter, it was anticipated that the sale — which had been transferred from NextEra Energy to PAAW in recent months — would proceed through the regulatory process, with the sale being finalized sometime in mid-2024. However, with the passage of the charter, Towamencin Township must terminate the agreement by the time the charter takes effect on July 1, according to Government Study Commission Vice Chair Jenn Foster.
“It is incumbent upon the Towamencin Board of Supervisors to adhere to the provisions of the new Home Rule Charter, as required by our State Constitution,” said Foster, in a joint statement with Government Study Commission Chair Kofi Osei. “We will work to ensure they terminate the Asset Purchase Agreement per the Termination language in Section 14.01. In addition, we will continue through the formal protest process with the Pennsylvania Public Utility Commission (PUC), working closely with the Office of Consumer Advocate.”
While hopeful that PAAW would back out of the sale upon the passage of the Home Rule Charter — akin to Aqua backing out of their agreement to purchase the Norristown Municipal Waste Authority following the passage of a Home Rule Charter — Osei and Foster said they had planned contingencies should the buyer persist in the purchase of the system.
“There were a variety of scenarios in our minds when we set the schedule for the GSC. One of which was the possibility that a company better equipped than NextEra would come in to buy our system and expedite the PUC process. This is why we pushed for a May referendum,” said Osei and Foster. “PAAW would be the first utility company to challenge Home Rule given that Aqua bowed out of Norristown, and NextEra bowed out of Towamencin.”
PAAW said they’ve outlined “the many public benefits of this sale to the Towamencin community that will result from our industry-leading wastewater expertise and capacity to finance necessary capital improvement projects that will benefit customers” in their filing with the PUC.
“We also have the ability to address the environmental compliance challenges of the system, including the history of exceedances and failures to meeting certain testing requirements, in addition to offering improved cybersecurity, customer service, and emergency response on evenings and weekends,” said Rahn.
In response, Foster and Osei dismissed the claims as corporate propaganda and attacked their rates and fees.
“Their company isn’t doing any magic financing: they just charge more, and triple our rates at that,” said Foster and Osei. “We can upgrade our sewer system and continue to meet regulatory compliance without getting anywhere close to tripling our rates.”
It’s unclear if a Home Rule Charter can negate the sewer sale, as one has never been used to legally prevent the sale of a municipal asset. Osei maintains the solicitor for the government study commission provided an opinion indicating the charter would be sufficient to overturn the sale, however the four Towamencin Supervisors who voted in favor of selling the sewer system maintain that a Home Rule Charter would be unable to negate the sale and could potentially open the township to costly litigation.
When asked about a potentially prolonged legal battle and the costs associated with such litigation, Osei and Foster said the four supervisors who voted in favor of the sale had multiple opportunities to either negotiate or limit legal liability, and the question should be posed to them.
“Both Supervisors Wilson and Marino were made aware of NextEra’s desire to exit the agreement shortly after the Government Study Commission — composed of all NOPE members — was elected in November 2022. In addition, the township was aware of the Home Rule Charter ballot question, prior to voting to transfer to PAAW,” said Osei and Foster. “Any concerns about potential litigation costs should be directed to the supervisors that voted to transfer the agreement to PAAW without considering how Home Rule might impact the sale. The township was party to the change in purchaser, and therefore had negotiating power. The fact they did not use that opportunity to limit legal liability is inexcusable.”
Towamencin Supervisors Rich Marino and Laura Smith did not provide answers to questions provided by North Penn Now, however Marino did respond indicating he believed the township was going to make an official statement, and he would send it over when released.
That statement was not available at the time of publication, however we will include it in this article if/when received.
See also:
Letter: Next Steps for Towamencin Post-Home Rule Charter Passage
Towamencin Voters Pass Home Rule Charter as Fight to Overturn Sewer Sale Continues
Everything Towamencin Residents Need to Know About Tuesday’s Ballot Question on Home Rule Charter
PA American Water to Take Over Towamencin Sewer Purchase Following Vote by Township Supervisors
