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randompittuser t1_iy1bq5l wrote

Reply to comment by pa_bourbon in The danger of for-profit water companies such as Aqua America by [deleted]

At the end of the day, there’s just not a reasonable case for privately owned utilities. You argue that the fee structure is a problem with Harrisburg. And that allocating money to improvement and maintenance was also a problem with Harrisburg. Sounds like a lot of problems with Harrisburg. Maybe we should fix Harrisburg to work for us before we hastily sell off the rights to manage our public utilities to companies that focus on profits rather than service.

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pa_bourbon t1_iy1ghe9 wrote

Never said Harrisburg was the problem. My point was that Harrisburg provides oversight and it’s a public process. All states follow similar processes under guidance provided by the FERC (Federal Energy Regulatory Commission).

It’s a public process following well defined rules. It’s not a bunch of execs in a smoke filled back room setting an agenda to screw the little guy.

Look at Pittsburgh Water and Sewer Authority for a prime example of the issues that arise from a government owned utility that refused to raise rates forever and the infrastructure is in terrible disrepair.

The real issue is that it takes hundreds of millions (billions for some bigger utilities) in investment to keep these systems running. Think about the damage that one big ice storm does to electric wires - in order to get that investment done, there has to be a way to get a return, since the investment horizon is so long.

People will argue that utilities are too critical to leave to the free market, so the bodies like the PA PUC were created to regulate it. Regulation does not mean zero profit. The capital gets paid either way - whether the utility is owned by the government or a public company. In a public company it’s dividends and stock appreciation. In a government utility the utility pays interest on its debt that it incurs to build and maintain the infrastructure.

During the pandemic, the PUC was very stingy with rate increases - some might say rightfully so. But the utilities still had maintenance to perform and improvements to make. Now they are back asking for increases as their costs have increased just like everyone else. Add that to rising commodity prices and you get a double whammy.

My electric commodity prices went up over 45% last year. It’s a straight pass through from my electric company - they don’t make any money on the electricity itself. It kind of is what it is. Costs are rising elsewhere. Look at the price of eggs? Where is the outcry about the egg conglomerates trying to artificially raise prices to screw us? Should the government take over all chicken farms too?

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