DEP, EDWA agree to receivership plan with PAWC
Photo by Mike Jones
State environmental regulators and East Dunkard Water Authority have agreed to the terms of a receivership with Pennsylvania American Water Company and filed a joint motion Wednesday asking Commonwealth Court to approve the plan.
If approved by the appellate court, the state Department of Environmental Protection and EDWA would avoid a hearing on the matter and streamline the process in having PAWC take control of the embattled water provider in southeastern Greene County.
DEP began pushing for the receivership on Nov. 1 when it asked the court to transfer East Dunkard’s operations to PAWC after issues at its treatment plant near Dilliner left 4,200 people without water for several days in late October. PAWC agreed to purchase EDWA’s assets and operations for $5 million last July, making it the obvious choice to take on the receivership.
The joint motion filed this week includes a proposed order for Commonwealth Court to consider, which offers a laundry list of provisions for how the receivership would be handled while also giving the court discretion to make changes. The petition apparently was crafted during a Jan. 4 mediation session between all the parties in an attempt to avoid having the appellate court make its own ruling on the matter.
It’s not known when the court will decide whether or not to approve the proposed order as currently written.
East Dunkard’s board approved the receivership agreement during its Feb. 1 meeting, although water authority officials are not commenting on the situation. Lane Turturice, who serves as EDWA’s solicitor and signed the joint motion with DEP, did not respond to multiple phone calls seeking comment on the receivership.
DEP’s press office in Harrisburg also did not respond to an email about the matter, and a PAWC spokesman declined to comment since the order has not yet been approved. But in a letter written by PAWC Vice President and General Counsel Andrew Swope and included in the petition, the company confirmed that it “consents to being named and serving as the court-appointed Receiver” for EDWA.
“We look forward to working with the Court and parties in fulfilling this Receivership role,” Swope wrote in the letter dated Monday.
The receivership will give PAWC total and complete control of EDWA’s system and authorize it to provide water, maintain equipment and bill customers. It will also allow PAWC to make infrastructure upgrades as needed to come into compliance with state and federal drinking water regulations. It also empowers the water company to hire and terminate workers, establish their compensation and evaluate their performance.
East Dunkard’s board and employees are not permitted to interfere with PAWC as its workers prepare to take control of the water authority, and they are expected to cooperate with the transition once the court grants the receivership.
Capital expenses that use authority funds and cost more than $10,000 must first receive court approval, although there are numerous exceptions, including specific infrastructure improvements required by the receivership. It also appears the East Dunkard Water Authority’s board will remain in place in a limited capacity and can object to capital expenditures by petitioning the court.
The proposed order also protects PAWC as it kicks the tires on operating the authority while its purchase of the system is being reviewed by state regulators.
“(PAWC) shall not be liable for preexisting conditions, defects, or regulatory or statutory violations arising from the Authority’s management, operation and maintenance of the Assets and System, including any noncompliance during the receivership period arising from such preexisting conditions, defects, or regulatory or statutory violations,” the proposed order states.
It also states that no person or entity may sue PAWC in connection with East Dunkard’s assets or system without first receiving permission from the court. However, that does not preclude the DEP from enforcing rules and regulations should issues arise.
PAWC is expected to notify the court within four months of the order whether it is “able and willing” to proceed with the purchase of the EDWA’s assets. The receivership would officially be terminated within 30 days of when the transaction is completed.