For residential ratepayers, the PSC decision means a 9% increase in monthly service fees for water meters — $15 to $16.40 — and about an 11% increase in water consumption charges. The company had sought more. (Getty Images)

FRANKFORT — Kentucky American Water customers are due a refund after the state utility regulator rejected part of a rate increase the company began charging in February and chastised it for not doing more to stem water loss from its system.

Kentucky American Water, serving more than 138,000 customers in Lexington and more than a dozen counties, had asked last year for a revenue increase of almost $26 million or more than 22%.

In a May 3 order, the Public Service Commission (PSC) pared the revenue increase to $10.6 million. The regulator also rejected expenses that Kentucky American Water sought to recoup to cover inflation, food and gifts for employees, and excess fuel and power costs.

For residential ratepayers, the PSC decision means a 9% increase in monthly service fees for water meters — $15 to $16.40 — and about an 11% increase in water consumption charges. Customers will also receive a refund from when the water utility began on Feb. 6 to collect rates under its proposed increases. The company had asked for a 33% increase in service charges for residential meters to $20 a month, along with an across-the-board 36% increase in the water consumption charges.

Susan Lancho, a spokesperson for Kentucky American Water, a subsidiary of publicly-traded American Water, said in a statement that the utility is reviewing the order and communicating with the PSC about next steps following the order.

The Lexington-Fayette Urban Government and Attorney General Russell Coleman collaborated in the rate case, raising concerns about the size of the rate hike request and the utility’s? proposed expansion of a program originally meant to replace “high-failure” water lines creating leaks.?

Susan Straub, a spokesperson for the Lexington mayor’s office, in a statement said the city always intervenes in Kentucky American Water’s “frequent rate hike requests” in an effort to “keep the cost of living low in Lexington.”?

Coleman specifically took issue with the increased monthly water meter service charges, saying in a filing that it could be a “financial hardship” on “customers already struggling to make ends meet.”?

Water loss rises even as company replaces aging infrastructure

Coleman and the LFUCG opposed a proposed expansion of what’s called a Qualified Infrastructure Program (QIP), created in 2019 with the PSC’s permission, to help Kentucky American Water recoup more quickly the costs of replacing “high-failure” cast iron and galvanized steel water main pipes. At the time, according to the utility, such water main pipes accounted for nearly two-thirds of water main breaks despite only making up 15% of the utility’s distribution system.?

The utility had argued it needed to expand its QIP to be able to recoup costs on more miles of water pipeline each year and to be able to replace more types of water pipeline, beyond just galvanized steel, in order to to be able to replace its aging water infrastructure in a reasonable timeframe.?

But Coleman and the Lexington-Fayette Urban Government pushed back against those arguments. They hired a consultant who argued in a filing the expansion of the QIP would more than double the scope of the pipe replacement program and burden ratepayers with the cost.?

Greg Meyer, a senior principal with the Missouri-based firm Brubaker and Associates Inc., said in a filing the QIP allows Kentucky American Water to recoup costs to replace water pipes on its own without oversight.?

“[T]he company is asking the commission to broadly expand the amount and type of pipeline replacement. It does not appear that the Company has given adequate thought to rate affordability,” Meyer said in a filing.?

The PSC in its order also noted that even with an existing QIP to fix water leaks in specific, problematic water mains, Kentucky American Water has seen increased rates of water loss in recent years. Kentucky American Water’s percentage of unaccounted for water loss in its system has inched up from 19.95% in 2018 to 21.59% in 2022, according to the PSC.

Under state regulations, a water utility can’t recoup costs through rates for unaccounted water loss if the percentage of water loss exceeds 15%, though a utility can ask for a different standard to follow.

Kentucky American Water requested their water loss standard be raised to 20%, saying the 15% limit was “unrealistic” given that there’s no one solution to fixing water loss. The PSC wasn’t convinced, denying the request and asserting the utility hadn’t done enough to address existing water loss.?

Specifically, the regulator in its order wrote Kentucky American Water hadn’t developed a formal plan to reduce water loss nor had requested from the regulator additional personnel or equipment to deal with water loss.?

“This signals to the Commission that Kentucky-American does not appear to take the increasing water loss as a serious matter. This is a cause for serious concern,” the PSC wrote.?

Lancho, the Kentucky American Water spokesperson, in an email did not answer Lantern questions about criticism of its water loss or its QIP.

For residential ratepayers, the PSC decision means a 9% increase in monthly service fees for water meters — $15 to $16.40 — and about an 11% increase in water consumption charges. The company had sought more. (Getty Images)

FRANKFORT —? Rep. Kevin Bratcher, a Louisville Republican, says he wants to be on the right side of history when it comes to the man-made “forever chemicals” that are in Kentucky’s waterways, fish and some Kentuckians’ drinking water.

He likens the widespread presence of per- and polyfluoroalkyl substances, or PFAS for short, to lead poisoning. “How many years did it take before folks and the industry got their arms around that, killing so many people? I don’t want to look back and say, ‘You didn’t do anything for this,’ when it was obvious that some things are happening and there’s a lot of smart people concerned.”?

Over the past three years, Bratcher has co-sponsored legislation filed by his Democratic colleague Rep. Nima Kulkarni, also of Louisville, aiming to raise awareness of and prevent exposure to the chemicals long used in products ranging from nonstick cooking ware to firefighting foam to food packaging. Those bills haven’t received committee hearings.?

It’s been an uphill battle in the Kentucky legislature, where Bratcher says much of the challenge is getting his fellow lawmakers to understand the issue in the first place. Exposure to the? toxic chemicals has a broad range of potential harmful health impacts: hormonal changes, increased cholesterol levels, decreased vaccine responses in children, increased risk of some cancers and more.?

In 2019, the legislature did ban the use of PFAS-containing firefighting foam for training purposes. And this year, lawmakers approved a resolution directing the Energy and Environment Cabinet to provide guidance about PFAS handling to entities discharging into wastewater treatment plants.

The federal government recently took steps that are expected to spur more state and local action.? The Environmental Protection Agency finalized limits on the amount of PFAS allowed in drinking water. Environmentalists hailed the move, though some utility groups worry about the costs of removing contaminants being monitored at incredibly small levels. The EPA last week? announced another new rule to hold industries discharging two types of PFAS legally and financially responsible for their cleanup.??

Kentucky Energy and Environment Cabinet spokesperson John Mura in a statement on the finalized drinking water rule said the cabinet has been working with public water systems on “sampling, treatment options, community outreach and training to ensure safe drinking water.”?

Mura said fewer than 10% of more than 400 water utilities tested in Kentucky had PFAS at levels above the maximum limits set in the new federal rule.

Kulkarni says Kentucky’s legislature should do more. And while she believes the federal regulations are a positive development, she pointed out that they set the maximum limits for PFAS in drinking water higher by multitudes than the lifetime health advisory limits released by the U.S. Environmental Protection Agency in 2022.?

“I don’t hail it as any kind of a huge step, but I mean it’s something,” Kulkarni said in reference to drinking water regulations for PFAS. “Ideally, we come up with, obviously, technological devices or processes to test for PFAS at lower concentrations because there is no safe amount.”?

Kulkarni was one of two Kentucky lawmakers, along with Rep. Al Gentry, D-Louisville, to sign onto a letter from 278 state lawmakers across the country supporting the federal drinking water regulations.?

For one type of “forever chemical,” PFOA, the maximum exposure before a person might experience “adverse health effects” is .004 parts per trillion (ppt), according to the 2022 interim health advisories. The maximum limit allowed in drinking water for PFOA under new federal regulations is 4.0pt. For reference, 1 ppt is equivalent to one drop of water in 20 Olympic-sized swimming pools.?

Kulkarni argued state government could do more to identify the sources of PFAS in the state, tying PFAS regulations to health outcomes in communities instead of waiting for slower action from federal regulators tied to an arbitrary testing limit.?

“Because people are exposed to PFAS, there’s a duty that we have to be as proactive as possible,” Kulkarni said. “If there isn’t a good solution out there, we should be looking for the best solution and not waiting for someone else to come up with it somewhere else. This is going to be addressed locally in any given state regardless of EPA levels.”?

Testing and exposure

The commissioner of the Kentucky Department of Environmental Protection Tony Hatton addressed lawmakers in a committee hearing in July 2023 about the PFAS testing his agency has done since 2019, saying the “investigative work” was done in part to prepare for the drinking water standards established by the EPA.?

The state found all 98 fish samples collected from Kentucky lakes and rivers tested positive for PFAS. One or more PFAS were detected in 83 of 194 water treatment plants; 36 of 40 monitoring stations testing surface waters detected PFAS.

The Somerset city council last year voted to stop accepting landfill leachate — liquid created when rainwater filters through landfills containing chemicals and residuals from the waste — to be treated at its local wastewater treatment plant because of citizen concerns about PFAS in the landfill leachate. Republican Rep. Tom Smith asked Hatton in last year’s committee hearing about the Somerset situation before the committee.?

Hatton responded the cabinet was focused on potential PFAS exposure in drinking water and that the “other parts of it are so complex they’re not going to be resolved very quickly.”?

The U.S. Environmental Protection Agency is developing new guidelines and standards for landfill leachate after a study found PFAS in 95% of leachate in surveyed landfills.?

Sen. Cassie Chambers Armstrong, D-Louisville, also asked Hatton about other potential ways children can be exposed to PFAS, such as through waterproof clothing, and if there was a federal or state standard requiring consumers to be notified of PFAS in products. According to the Centers for Disease Control and Prevention, PFAS exposure is possible through a number of ways from consumer products, food and more.?

Hatton said at the time the sources of PFAS into the environment would “probably be more heavily addressed” once “the regulatory basis” for PFAS is established.?

Similar to other states, the Kentucky Energy and Environment Cabinet has sued the chemical company DuPont de Nemours, consumer products company 3M and other companies over alleged PFAS pollution, alleging the companies are knowingly contaminating Kentucky’s natural resources.?

Sen. Brandon Smith, R-Hazard, who brought Hatton before lawmakers last year and sponsored the resolution passed on PFAS this year, told the Lantern criticism from advocates that the state hasn’t done enough to address PFAS is fair. He hopes the issue “will have a lot of energy” in next year’s legislative session because it’s “going to absolutely have to be addressed.”

“More people than me will be talking about it, and people that know a lot more about it than me will be talking about it,” Smith said.

PFAS protection — at a cost

State environmental protection officials have worked with at least two utilities — the North Marshall Water District and the Ohio River-bound city of Lewisport — on reducing high levels of PFAS found in their water systems.?

PFAS contamination forced the shutdown of a water treatment plant supplying Kentucky Dam Village State Resort Park last October. Roger Colburn, the general manager for the North Marshall Water District in Marshall County, told the Lantern he shut down a plant that had been treating groundwater after state testing found one of the operating water wells had nine types of “forever chemicals” present at nearly three times the federal maximum limit now established in drinking water.?

Colburn said the chemicals are “probably the largest problem the drinking water industries had to address over the course of the last 30 or 40 years.”

Under the new regulations, drinking water utilities would have to notify their customers when PFAS levels exceeded the maximum limits and work to remove the chemicals through processes like reverse osmosis or granular activated carbon.

In a mid-November post on Facebook, the Marshall County water utility notified residents that it had taken the contaminated water well offline. Colburn said he thankfully hasn’t needed the water well yet to meet his utility’s water demand without a costly alternative. Other utilities haven’t been as lucky.?

Public notification of PFAS contamination of drinking water became an issue in one northeastern Kentucky community. As reported by Louisville Public Media, residents of the Greenup County city of South Shore weren’t notified by local officials about PFAS contamination in the city’s drinking water, the highest level of PFAS contamination found by state officials out of all systems tested in Kentucky. The city received a more than $8 million loan last year to build a water line to the city of Portsmouth, Ohio, across the Ohio River to replace the PFAS-contaminated water supply.

But the costs of removing PFAS contamination to below incredibly small limits worries groups including the Kentucky Rural Water Association, representing drinking water utilities across the state. Utility groups are concerned about the financial burden testing and treating PFAS will have on smaller utilities in particular. The Biden administration is touting billions of dollars available to help utilities with PFAS treatment, though KRWA leadership believe the long-term costs of the regulations, including ongoing testing, could still fall on Kentucky ratepayers.??

But Teena Halbig, a retired microbiologist and community activist from Fern Creek who urged her state representative Bratcher to focus on PFAS, says the health costs created by PFAS ultimately will outweigh the cleanup costs.?

“It’s hard for people to believe things that they really cannot see, and I can understand that,” Halbig said.? “It’s going to cost everyone, but what is it costing you to go to the doctor for health appointments, for the quality of life that you have?”

Pushback from industries that profit from PFAS may also be a barrier to getting significant PFAS legislation passed, according to a lobbyist representing unionized firefighters.?

Bratcher told the Lantern he was “visited by some companies” that had concerns when House Bill 116 was introduced this year. It was another bill sponsored by Kulkarni and Bratcher that would have, among other things, created created a public inventory of PFAS-containing products made in Kentucky. Industry representatives for the paint and coatings industry and the car manufacturer General Motors had lobbied on the bill along with groups representing environmentalists and scientists.?

Jeff Taylor, the legislative director for Kentucky Professional Firefighters representing firefighter and EMS unions across Kentucky, told the Lantern he supports Kulkarni’s efforts because “anything that raises awareness, with respect to how dangerous this product is, is good for us.”?

Taylor said firefighters’ main focus with PFAS is removing the substances from firefighting protective gear that can break down in the heat, exposing firefighters? to the man-made chemicals. He said he knew firefighters who had served for decades, only to die from cancer connected to their line of work.?

“You can understand why we’re passionate about these issues,” Taylor said.

But the challenge with making legislative change on PFAS, he said, comes down to facing off against corporate interests that have a stake in using PFAS and profiting from? it.

“I don’t think it’s too much to ask the politicians that are making laws that you provide some type of consumer awareness as to what this product is and what it’s in,” Taylor said.?

This story was updated with additional information about House Bill 116.

Despite the hazards that low head dams pose to humans and wildlife, fewer than a dozen of the 1,000-plus such structures in Kentucky have been removed in recent years, including a failing low head dam on the Barren River, above. (Kentucky Department of Fish and Wildlife Resources)

In the early years of this nation and state, settlers built small dams on rivers and streams to capture waterpower for mills, enable navigation and assure a water supply. In the middle part of the last century even more were built as government agencies tried to bring waterways under control.

Today, thousands of those dams remain although new power sources and transportation methods, among other societal changes, have made most of them obsolete. Worse, almost all of them present a threat to humans and the aquatic environment.

In Kentucky alone, there are probably more than 1,000 of what are called low head dams — structures spanning a waterway that range in height from as little as one foot to about 15 feet.?

“In a lot of cases they’re not being used at all, nobody even knows who owns them, they’re just sitting there crumbling and they’re just a hazard” said Ward Wilson, a former executive director and board member of the Kentucky Waterways Alliance.

Like many historic structures, they can be scenic. There’s still water, like a pond, above the dam and, below, spillways that look like horizontal waterfalls. But, unlike aging courthouses and elegant mansions, low head dams disrupt aquatic species and degrade our environment. And they kill people.

“It doesn’t look like much, it doesn’t look like some raging rapid, but the way the water flows, it’s really hard to swim out of,” explained Wilson. “People are out there wading and they get caught and they die.”

That dangerous aquatic vortex is variously called a boil, backwash, danger zone or a drowning zone.?

A National Weather Service illustration dispassionately describes what it designates the “drowning zone” as “area of river in which only prompt, qualified rescue is likely to save a victim.”

And, just as there is no count of the number of dams themselves, there is no official database for dam-related deaths, either nationally or in Kentucky.

In Kentucky, there have been in the neighborhood of 40 fatalities documented in recent decades as kayakers, canoeists, tubers, swimmers and waders were sucked into their drowning zones. But Mike Hardin, assistant director of fisheries at the Kentucky Department of Fish and Wildlife Resources, says the death toll is much higher. “When you look up the history of some of these old dams … you will inevitably come across some old news story of somebody drowning. It is not new,” he said. As for the true total over the lifespan of the dams, he said, “I’d hate to think of what that number is.”

Water quality declines

Human deaths at low head dams are tragic and newsworthy. Less likely to capture headlines is the profound toll the dams take on aquatic species.?

“The rivers have a lot of functions and processes, such as moving sediment and gravel,” Hardin explained. “When the river flows it keeps those things clean swept, it keeps the water cool, it provides more complex habitat so that results in healthier fisheries, more diverse and rich species.”

But when rivers are interrupted by dams that all breaks down. “The long and short of it is, you’re basically creating a kind of semi-pond,” explained Lee Andrews, the field office supervisor in Kentucky for the U.S. Fish and Wildlife service. “These structures that seem like pretty small, localized, man-made creations really have some wide-ranging effects.”

When water slows down or stands still, oxygen levels drop, the temperature rises and the sediment the water is carrying falls to the bottom, burying the gravel and stones on the stream floor, and the species that live there —? invertebrates like mussels and crayfish — in mud.?

In the loop that nature creates, declining water quality destroys mussels and a declining mussel population reduces water quality. While mussels are small, Andrews said, they are nonstop water purifiers. “That mussel is out there 24 hours a day, seven days a week, inhaling that water and filtering constantly. The more of them you have the cleaner your water is going to be.”?

Dirty water kills mussels and the fewer mussels, the dirtier the water.

And there are many fewer. Of the 103 species of mussels native to Kentucky, 20 are no longer found here and another 36 are considered endangered or threatened.

Damming streams also damages fish populations. Surveys have found the population of smallmouth bass “was 1,500% higher in free flowing water than it was in the impounded water,” Hardin said.?

In addition to higher temperatures and reduced food supply, dams also take a toll by isolating populations of the same species above and below the impoundment, which decreases the genetic diversity “that makes that species a little more resilient,” Andrews said.?

Plus, more species find homes in the stream when dams are removed. This summer, a year after a dam was removed on the Barren River, Andrews said, “we started finding some fairly rare fish were showing up on some of those habitats that were created.”

Beyond the individual streams and the species that occupy them, the entire watershed benefits, said Rich Cogen, president of the?Ohio River Foundation. Removing dams improves water quality in streams flowing into the Ohio, which American Rivers recently designated an?endangered river, and “since the water quality is better in those rivers then the water quality is improved in the Ohio River,”?Cogen said.

Removal is costly and complicated but cheaper than replacing a dam

The benefits are many but the number of low head dams removed is few, perhaps seven to 10 in total in Kentucky in the last several years. There are a lot of reasons for the slow pace. It can be costly, although never as expensive as replacing a failing or damaged dam. Sometimes it’s not even clear who owns a dam and obtaining all the permits — federal, state and sometimes local — required to remove a dam, can be a long and complicated process.

Cogen, who has been involved in several dam removals in Kentucky and Ohio, said there can also be concerns about water supply. “Land owners get nervous but really only people very close to the dam are going to see significant change,” he said. When a dam was removed near Owingsville a couple of years ago, a farmer upstream was worried about losing his water supply but the change “was imperceptible.”?

And, people don’t like change.?

When a dam has been in place for decades or centuries, the people who live nearby have a store of memories built around the way it has always been.?

Dam 6 on the Green River failed in 2017, becoming a hazard, and had to be removed, Andrews said, but it was a sad leave-taking. “We heard stories like ‘my grandpa taught me how to fish right here,’ ‘me and my girlfriend, now my wife of 55 years, used to come down here and picnic.’”

Andrews and others said that removing dams typically provides more opportunities, and safer ones, for recreation. Often, much of the debris from the dam is broken up and used to stabilize the banks, and the project includes creating a small park and new access to the water. Canoeists and kayakers no longer have to portage around the dams and people can play and swim safely in the free flowing water.?

Andrews’ message is simple: “If you know of one of these places don’t be afraid to allow somebody to take it out.”?

The benefits, he said, “spread all across society.”?

A healthier environment means more species thrive and fewer have to be listed as endangered which prompts regulatory intervention. But Andrews said that his agency doesn’t want to spend its time creating and enforcing regulations, it wants to save species. “We just want to have better habitat and more critters moving around out there for people to enjoy.”

Bass like free flowing water

The? Kentucky Department of Fish and Wildlife Resources surveyed sport fisheries to compare free flow vs. impounded flow in the Barren and Green rivers and found notable differences based on habitat.

Barren River sport fishery

1. Dominant species:

• The free flow section of the fishery is dominated by smallmouth bass, spotted bass and rock bass. These species reach quality and trophy sizes.
• The impounded sections fishery is dominated by largemouth bass, spotted bass and bluegill. These species on average do not reach the quality sizes that anglers prefer.

2. Abundance of species:

• Black bass catch rates averaged 106% higher in free flow sections.
• Smallmouth bass, the more desirable stream black bass, catch rate averages 600% higher in the free flow sections.
• Rock bass catch rates average 3,731% higher in the free flow sections.
• Bluegill are the only sport fish species that is more prevalent in the impounded sections.?
• Overall, sport fish catch rates of all species combined was 51% higher in the free flow sections than the impounded sections.

Green River sport fishery

1. Dominant species:

• Upstream of? Mammoth Cave National Park the free flow fishery is dominated by smallmouth bass, rock bass and channel catfish. These species reach quality and trophy sizes.
• Pool 5 (impounded) is dominated by spotted bass, largemouth bass and bluegill. These species on average do not reach the quality sizes that anglers preferof Black bass catch rates averaged 69% higher in the free flow sections.

2. ?Abundance of species:

• Smallmouth bass, the more desirable stream black bass, catch rates average 155% higher in the free flow sections.
• Rock bass catch rates average 2,600% higher in the free flow sections.
• Bluegill are the only sport fish species that is more prevalent in the impounded sections.
• Overall sport fish catch rates of all species combined was 114% higher in the free flow sections than the impounded sections.

This story has been corrected to show that Owingsville is the city near where a dam was removed. The city was incorrect in the earlier version. It also has been updated to clarify that Ward Wilson is a former member of the board of the Kentucky Waterways Alliance.

Workers replace older water pipes with a new copper one in Newark, N.J., Thursday, Oct. 21, 2021. (AP Photo/Seth Wenig)

For residents in some Pennsylvania communities, flushing the toilet has suddenly gotten much more expensive.

In many townships and counties, rates have spiked as private water companies have bought up wastewater systems from local governments.

The new push to privatize sewer services follows the passage of a state law in 2016 that allows the dollar value of water systems to include not just pipes and plants but market factors such as their worth to the community, allowing them to be sold at much higher prices.

Community groups and municipal leaders say that law, an example of “fair market value” legislation, has unleashed dozens of buyout attempts as private companies have offered tens of millions of dollars for local water systems. Pennsylvania’s municipalities have been at the forefront of the national movement, though an ongoing court case could slow the state’s momentum.

The deals provide a short-term cash boost for local governments, which can struggle to cover the cost of aging infrastructure. But critics say the public services and tax savings that governments might provide residents with the quick money don’t make up for the rate hikes, a phenomenon known as “taxing through the tap.”

“Big Water tells municipal officials, ‘You’re going to get free money.’ “That’s a lie. That money is going to be paid for by ratepayers,” said Bill Ferguson, a co-founder of Keep Water Affordable. The community group protested the 2020 sale of the wastewater system in New Garden Township, a community of about 11,000 residents near the Delaware border, to Aqua Pennsylvania.

Fifteen states have enacted “fair market value” laws to boost the sale price of water systems, according to the National Association of Water Companies, an industry group. Most of those laws have passed within the past decade, with Florida becoming the latest earlier this year. Public water activists say the private water industry has lobbied hard in state capitols, while also pushing Congress to provide them with federal funding that has historically been reserved for local governments.

Investor-owned Kentucky American Water touts ‘regionalization’

In Kentucky, “fair market value” legislation has been introduced in recent years but did not advance after drawing opposition from the Kentucky League of Cities, Lexington Mayor Linda Gorton, the Kentucky Resources Council and the Attorney General’s Office of Rate Intervention when the AG was Andy Beshear, now Kentucky’s governor.

The biggest beneficiary of changing Kentucky’s law would be Kentucky American Water which has framed the legislation as a way to achieve economies of scale through regionalization. Kentucky American is a subsidiary of investor-owned American Water, based in New Jersey, the nation’s largest private water and wastewater company.

Kentucky’s current law values utilities being sold at depreciated book value and “ensures customers do not pay twice for the pipes in the ground that deliver their water,” wrote Rebecca Goodman, then executive director of the rate intervention office in opposition to Senate Bill 163 in 2019. Rep. Jared Carpenter, R-Berea, was the sponsor.

“An additional concern,” she wrote, is that under a “fair market value” law, the acquiring “investor-owned utility has no incentive to keep the purchase price down since its shareholders will earn a return on the value of the assets.” Goodman is now secretary of the Energy and Environment Cabinet.

“SB 163 benefits only the investor-owned utilities and its shareholders, “Goodman wrote, “Existing and newly acquired customers will see their rates increase as the utility’s rate base increases.”

Costs of private ownership

Research published last year in Water Policy, the journal of the international think tank World Water Council, surveyed the United States’ 500 largest water systems and found that private ownership was the most significant variable in driving up utility bills — even more than aging infrastructure, water supply and local regulations.

While the survey focused on drinking water systems, Marcela González Rivas, an associate professor in the Graduate School of Public and International Affairs at the University of Pittsburgh and one of the study’s authors, said privatization of any system conflicts with the human right to water.

“Providing water is really expensive as it is,” she said. “If you then add making a profit as part of the cost of the service, it just makes it really unaffordable.”

New Garden Township was the first sewer sale that state regulators approved after the passage of Pennsylvania’s valuation law. Ferguson’s group says the community?has seen bill increases approaching?85%?since the takeover.

Opponents of valuation laws say the measures have largely passed with little public awareness or controversy, as water companies have donated heavily to Republicans and Democrats alike. At the local level, residents are often unaware that their water system is up for sale until a deal is being finalized.

“If someone else had been No. 1, we might have had time [to stop it],” said David Unger, chair of the New Garden Township board of supervisors, who was elected after the sale was finalized. “The fact that we were first in line — we became the lesson.”

‘Fair market value’

Roughly 97% of sewer customers in the U.S. get their service from a public system, according to the U.S. Government Accountability Office. But private water companies, which control more than 10% of the drinking water market, are pushing to get into the wastewater business. In many states, “fair market value” legislation has been a key tool in that effort.

Historically, the sale price of regulated water systems has been determined by the book value of their assets, including pipes and treatment plants. But these new state laws enable outside appraisers to incorporate other factors, such as the system’s value to the community. Critics say that has allowed systems to sell for many times what they’re worth.

For local governments, the higher prices under the fair market value model make it enticing to sell off their infrastructure. And the water companies want a higher sale price as well: Higher acquisition payments allow the companies to charge higher rates to recover those costs, driving up profits, which are determined by a percentage of their investments.

“Both the seller and buyer want the highest price possible,” said Mary Grant, director of the Public Water for All campaign with Food and Water Watch, an environmental advocacy nonprofit. “Who loses? It’s the ratepayers.”

The private water industry argues that privatization is an important tool when cash-strapped municipalities can’t keep up with the maintenance needs of their aging infrastructure. Fair market value, they say, gives local governments financial relief via the hefty sale price.

“Most of the time it is willing seller, willing buyer,” said Jenn Kocher, vice president of communications and marketing with the National Association of Water Companies, a trade association. “Municipalities … see that there are better options out there through private systems and their economies of scale.”

Many public water advocates acknowledge that sell-offs can help keep water systems running when municipalities can’t afford the maintenance costs. But in Pennsylvania, they say, many of the systems being bid on are in perfectly fine shape.

“I don’t think they’re targeting distressed systems at all,” said Kofi Osei, a member of Towamencin Neighbors Opposing Privatization Efforts, a local activist group. “Our system is actually very well maintained, and we recently did some pretty substantial upgrades.”

Osei’s group is fighting the sale of the sewer system in Towamencin Township, a community of nearly 18,000 residents near Philadelphia, to American Water. Activists backed a home rule charter, passed by voters this year, to amend the county’s governing document to ban privatization of the system. Township supervisors, Osei said, are still trying to proceed with the sale, while residents are suing them to block it.

Neither American Water nor township Board of Supervisors Chair Chuck Wilson responded to an interview request.

‘Ground zero’

In Pennsylvania, Food and Water Watch said that more than 30 water systems — primarily sewer — have been sold off since the passage of the 2016 law.

Another dozen or so local governments are currently considering offers, according to Jennie Shade, senior director of government relations with the Pennsylvania Municipal Authorities Association, which represents the special purpose districts that oversee public services and is seeking to protect local oversight.

Shade’s group estimates that completed acquisitions?are costing?ratepayers $70 million to $85 million?annually?in higher water bills, and pending sales could double that amount.

“We’re seeing buyer’s remorse in a lot of communities,” she said. “Pennsylvania has become ground zero for the commoditization of our precious public water supply.”

Since the beginning of this year, Food and Water Watch has tracked 31 water or wastewater systems nationwide that have been purchased by private companies or have a pending sale proposal. All but three are in states with fair market value laws on the books. Thirteen are in Pennsylvania.

Kocher, with the National Association of Water Companies, said many of the communities that sold their systems would have faced rate increases anyway to pay for overdue maintenance needs. Community activists said water companies’ rate hikes far exceed repair costs.

“We were told that without a sale, our rates would go up 78% to fund $12 million of infrastructure improvements,” said Pete Mrozinsi, a co-founder of the group in New Garden Township that opposed the sale to Aqua Pennsylvania. “After the sale, our rates went up 85% with no infrastructure improvements.”

Requests for comment from Aqua Pennsylvania and its parent company, Essential Utilities, were directed to a spokesperson with an outside communications firm, who was unable to arrange an interview by publication time.

Opposition grows

Activists in Pennsylvania say communities are starting to see the risks of privatization offers. Municipal officials in Bucks County, Newberry Township and Williston Township rejected purchase offers after significant local opposition.

State Sen. John Kane, a Democrat, made his living as a plumber but had never heard of the sewer privatization movement until he was elected in 2020. He learned that the city of Chester, which is in bankruptcy, was considering selling its water system for $410 million.

Kane said other communities in his district have seen rate hikes as high as 100% after selling off their water systems, and he’s joined local residents in opposing the Chester sale. He also has introduced legislation to repeal the state’s fair market value law.

“This is a junk accounting tool that games the system for private water companies to acquire infrastructure and profit off of basic human needs,” he said.

Kane’s bill has been stalled in the Consumer Protection & Professional Licensure Committee, which is chaired by Republican state Sen. Patrick Stefano. According to data collected by the government transparency group OpenSecrets, Stefano has received $13,500 in campaign contributions from water companies or their officials since 2014.

Stefano did not reply to a request for comment. House Speaker Joanna McClinton, a Democrat, did not respond to a request for comment, while staffers for Senate Majority Leader Joe Pittman, a Republican, said he was unavailable to connect for an interview.

OpenSecrets has tracked nearly 3,700 donations made by water companies or their associates to Pennsylvania candidates, totaling almost $2.7 million.

Activists won a legal battle earlier this year when the Pennsylvania Commonwealth Court overturned the state Public Utilities Commission’s approval of a sewer sale in East Whiteland Township. The court ruled that regulators had failed to show any public benefit of the sale.

Some activists think the court decision, if upheld by the state Supreme Court, could help dismantle the privatization push by forcing regulators to acknowledge its toll on ratepayers.

Jamie Lucke contributed to this story.

This story is republished from Stateline,?a sister publication of Kentucky Lantern and part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity.?

FRANKFORT — Kentucky’s utility regulator is responsible for managing a larger, more complex caseload despite having a diminished and less experienced staff than in the past, its chairman told lawmakers Wednesday.?

The Kentucky Public Service Commission regulates the rates and services of more than 1,100 utilities, ranging from massive investor-owned electric providers like Kentucky Power to small water districts that provide drinking water to rural communities.?

The quasi-judicial state agency, headed by three commissioners appointed by the governor and confirmed by the state Senate, also hears requests from utilities to retire or build new facilities, such as natural gas plants, and fields complaints from Kentuckians about service and rates.?

But in an interim legislative committee hearing, Commission Chairman Kent Chandler said the commission is completing its duties with fewer skilled employees, particularly attorneys and accountants. The agency is often seeing those skilled workers leave for significantly higher-paying jobs elsewhere, sometimes for double the pay working at a utility.?

“Something has to change because we’re getting, if not more cases, certainly more complex cases,” Chandler said. “We need to reduce the turnover of the people that we have because by the time they figure out what’s going on, they get really good at their job — they can go make money, some better money or have an easier job somewhere else.”

Chandler said the commission had 96 employees as of 2011; those employees had 12,000 cumulative months of PSC service. The PSC is now down to 72 employees, and they have less experience; their cumulative length of PSC service is 8,500 months.

Turnover rate for employees at the commission ranges annually from 20%? to 35%, with the turnover rate nearing 40% in 2022. The commission has had to keep more attorneys on staff to compensate for the expectation that new attorneys will leave after a little more than a year.

The entirety of management for the commission’s Division of Financial Analysis — whose staff accountants and economists examine a utility’s finances and assets — had recently also turned over. Finding replacements is difficult, he said, because the skill sets needed are often only found at other state utility regulators or utilities.?

“Those are the three or four people that know the absolute most about what we do about the financing, the economics, the accounting of utilities,” Chandler said. “It is just such a unique skill set and unique experience.”?

Chandler said the commission has contended with its hiring headwinds as it’s doing more work.?

On an annual basis, he said, the commission the past two years has issued about 1,700 orders. Before the two previous years, the most orders the commission had entered in a year in the past 15-year period was 1,500 orders.?

The commission is also dealing with what Chandler calls “the most consequential and complicated case” that he can find in the commission’s previous three to four decades: Louisville Gas and Electric and Kentucky Utilities is seeking approval to retire some of its coal-fired power generation and replace it primarily with natural gas plants, along with proposing two solar installations and a utility-scale battery storage facility.?

“There really are long-term detrimental effects to the economy of the Commonwealth and to our individual consumers for an under-resourced Public Service Commission, a Public Service Commission who doesn’t either have the opportunity to do its job well or frankly doesn’t do its job well,” Chandler said.?

Chandler said the commission has tried to reach out to business schools at universities in the state to advertise its job openings. He said recent increases in the amount of state funding the commission receives has allowed it to fill eight new positions.

“Hopefully we find a couple of solutions in there,” Chandler said. “But I just can’t give you a single silver bullet issue as to the reason why we’re having turnover that we can necessarily fix.”

Spring-fed stream in Jessamine County. (Kentucky Lantern photo by Jamie Lucke)

The U.S. Supreme Court in a major environmental decision on Thursday overturned the Environmental Protection Agency’s definition of wetlands that fall under the agency’s jurisdiction, siding with an Idaho couple who’d said they should not be required to obtain federal permits to build on their property that lacked any navigable water.

All nine justices agreed to overturn the 9th Circuit Court of Appeals’ ruling that endorsed the Biden administration’s broad definition of waters of the United States, or WOTUS, the term for what falls under federal enforcement of the Clean Water Act.

But they published four separate opinions that showed a 5-4 split in how far they would allow federal jurisdiction to extend, with the conservative majority ruling to significantly narrow federal agency power.

“It is a substantial change to the way wetlands have been regulated under the Clean Water Act” since the law’s 1972 enactment, said Ashley Peck, an environmental litigator and water quality adviser at Holland and Hart LLP. “It looks like it will eliminate jurisdiction for a huge amount of wetlands, particularly in the arid West.”

Conservative Justice Brett M. Kavanaugh and the court’s three liberals concurred with the ruling in favor of Idaho landowners Michael and Chantell Sackett, but objected to the majority’s narrow new standard, which they said introduced more uncertainty and would hurt water quality.

The Sacketts had sought to build on a piece of their property separated by a 30-foot road from a tributary to Priest Lake in the Idaho panhandle. Lower courts held they needed federal environmental approvals because of their land’s connection to Priest Lake.

The Supreme Court heard oral arguments in their appeal in October.

‘Continuous surface connection’ test

Writing for the court’s majority, Justice Samuel Alito said the Clean Water Act applies only to wetlands with a “continuous surface connection” to the navigable waters like streams, lakes, oceans and rivers that are indisputably covered by the law.

The Biden administration’s definition — that said an area with an ecologically “significant nexus” to a navigable waterway was subject to Clean Water Act enforcement — would put nearly all waters and wetlands in the country under federal jurisdiction, with little room for state enforcement, Alito wrote.

Wetlands must be virtually indistinguishable from the navigable waters for federal jurisdiction to apply, he wrote.

That standard would limit the EPA and Army Corps of Engineers’ authority to regulate wetlands, even in areas where no one had disputed federal power.

Alito, who was appointed to the court by President George W. Bush, praised the Clean Water Act for effectively curtailing water pollution. But he said the law “is a potent weapon” with severe penalties, and its power should be checked.

The text of the law uses both the terms “navigable waters,” which has a well-known definition, and “waters of the United States,” which does not, Alito wrote.

The EPA, Army Corps of Engineers and various courts have held that waters of the United States can include tributaries to navigable waters and even dry land with an ecological connection to those tributaries.

The inclusion in the statute of “navigable waters” means Congress was focused on the permanent lakes, rivers, streams and oceans that are generally included in that definition, even if some wetlands can also be regulated under the law, Alito wrote.

“Although we have acknowledged that the CWA extends to more than traditional navigable waters, we have refused to read ‘navigable’ out of the statute,” Alito said.

Some adjacent wetlands can still be considered waters of the United States, Alito said. But for the federal law to apply to a wetland, it “must be indistinguishably part of a” covered water, he wrote.

The ruling represents a sweeping shift in wetlands regulation, even for a conservative court with a recent history of restricting federal regulations.

“This was a broader brush than I expected,” Peck said. “This is always a possibility with this court, for certain, but I wasn’t necessarily expecting to have the whole regulatory regime upended.”

Kavanaugh and liberals band together

Kavanaugh, with the court’s three liberals joining, wrote that a continuous surface connection to navigable waters was not strictly necessary for wetlands to fall under federal jurisdiction. Waters can be adjacent without that connection, they said.

Kavanaugh, in a notable departure from the usual alliance on the court, said the majority rewrote the law and introduced new questions about wetlands that have long been subject to federal jurisdiction.

“The Court’s new and overly narrow test may leave long-regulated and long-accepted-to-be-regulable wetlands suddenly beyond the scope of the agencies’ regulatory authority, with negative consequences for waters of the United States,” he wrote.

Kagan blasts judicial policymaking

Justice Elena Kagan wrote a separate concurring opinion with fellow liberal Justices Sonia Sotomayor and Ketanji Brown Jackson that criticized the court for policymaking.

Drawing parallels with her dissent in a decision last year that restricted the EPA’s power to regulate carbon emissions at existing power plants, Kagan wrote that the court’s conservatives simply substituted their policy preferences for what Congress actually enacted.

The majority in this case invented a standard that laws that impact private property must have “exceedingly clear language,” Kagan wrote, putting “a thumb on the scale for property owners,” and disregarding the public interest in clean water.

“A court may not rewrite Congress’s plain instructions because they go further than preferred,” she said. “That is what the majority does today in finding that the Clean Water Act excludes many wetlands (clearly) ‘adjacent’ to covered waters.”

Lengthy legal fight

The case is part of a decades-long legal conflict to define the reach of the Clean Water Act.

Alito’s majority opinion referenced the years of shifting definitions and the uncertainty provided in various court cases and agency regulations, calling it “the persistent problem that we must address.”

In general, agricultural interests, home builders and Republican officials have argued that the federal regulations impose an undue burden and should be applied narrowly.

“The Supreme Court just ruled that Biden’s overreaching WOTUS interpretation is unconstitutional,” Missouri Attorney General Andrew Bailey, a Republican, said on Twitter. “This is a huge win for farmers across America.”

Environmental groups and Democrats have argued for a broader definition that they say allows the federal government to offer important protections.

“Federal protections that don’t depend on local politics or regional polluter influence are essential to vulnerable and disadvantaged communities nationwide,” Jim Murphy, the director of legal advocacy for the National Wildlife Federation, said in a statement “The court’s ruling removes these vital protections from important streams and wetlands in every state.”

Murphy called on Congress and state governments to adopt stronger standards.

The ruling doesn’t necessarily limit the issue’s long-running uncertainty, Peck said. While it settles federal jurisdiction for now, states, especially in the West, may decide to strengthen their own clean water laws and regulations, she said.

Reaction from Congress

Several Republicans in Congress responded to the ruling with enthusiasm.

“The Supreme Court’s decision is clearly a decisive win for America’s farmers, small businesses, property owners, and those who help build our infrastructure,” U.S. House Transportation and Infrastructure Chairman Sam Graves of Missouri and Water Resources and Environment Subcommittee Chairman David Rouzer of North Carolina said in a joint statement.

“This is great news for rural America!” Minnesota Republican Pete Stauber, the chairman of the U.S. House Natural Resources Subcommittee on Energy and Mineral Resources, tweeted.

“I’m glad to see the Supreme Court rightfully and unanimously blocked Biden’s ill-conceived #WOTUS rule,” U.S. Sen. Joni Ernst of Iowa wrote on Twitter. “This is a big WIN for Iowa, where nearly every industry is impacted.”

“Kansans are best positioned to conserve our land and natural resources,” Kansas Republican U.S. Rep. Ron Estes said. “And they don’t need Biden’s bureaucrats 1000 miles away to regulate the rainwater that accumulates in ditches in rural parts of our state.”

Fewer Democrats publicly commented on the ruling, but Senate Environment and Public Works Chairman Tom Carper of Delaware said the decision undermines the EPA’s ability to effectively regulate water pollution and puts “America’s remaining wetlands in jeopardy.”

“I strongly disagree with the Court’s decision, and I am deeply concerned about the future impacts of this case on clean drinking water, coastal and flood-prone communities, and wildlife across our nation,” Carper said.

This story has been updated.

A sinkhole developed in a Crittenden County dam last year. County officials decided to breach the dam with an excavator to prevent its possible failure. (Photo by Kentucky Energy and Environment Cabinet)

FRANKFORT — Kentucky dam safety officials faced a potentially dire situation last year: A sinkhole was rapidly growing in the slope of a dam in Crittenden County. A failure could have sent 180 million gallons of water cascading toward private developments and the local hospital.?

And there was no emergency plan. That’s because until last week Kentucky was one of a handful of states that does not require emergency plans for hazardous dams.

That’s changing under a law enacted by the legislature and signed Friday by Gov. Andy Beshear that will require some hazardous dams, including the one in Crittenden County, to have emergency action plans on file.

Senate Bill 277, sponsored by Sen. Johnnie Turner, R-Harlan, saw unanimous final passage by the state House of Representatives on the last day of this year’s legislative session.?

The legislation would require owners of dams with a hazard classification from the state as “significant,” “moderate” or “high” to have emergency action plans in case a dam should fail, potentially endangering lives and property downstream.

Emergency action plans are documents maintained by dam owners that identify potential ways a dam could fail, identify the responsibilities for monitoring a dam and mandate a procedure for what to do in an emergency situation. In particular, according to the State Association of Dam Safety Officials (ASDSO), these plans include water inundation maps were a dam to fail and a flow chart of who to call in what priority in an emergency situation.?

The Kentucky Center for Investigative Reporting found, as of 2019, that dozens of “high” hazard dams in poor or worse condition had no emergency action plans on file. Before the legislature enacted SB 277, Kentucky was one of seven states that didn’t require emergency action plans for “high” hazard dams as of 2021, according to ASDSO.?

Similar legislation had been filed in past years without gaining traction. A dam safety bill last year was amended to add? unrelated language that would have gotten rid of a Kentucky permitting program for animal waste operations not overseen by the federal government. That bill did not pass.?

Sen. Brandon Smith, R-Hazard, said at a Senate committee hearing that last year’s version of the bill “got tied up with some stuff there at the end.”?

Commissioner of the Kentucky Department for Environmental Protection Tony Hatton also spoke during the? hearing last month and recounted the crisis in Crittenden County.

“We saw last year, for instance, down in the city of Marion — through no fault of their own, they have a dam that impounds water that’s their drinking water supply, which makes it even doubly important, and they began to develop a fairly slow leak in the dam,” Hatton said.?

“When there was a decision made that we needed to take a look at this, there was a period of time there, where there were so many voices speaking, we didn’t really have a plan and know which way to go.”

Local elected and emergency management officials in Crittenden County at that time clashed with state dam safety officials over how to address the growing sinkhole in the dam, and the city of Marion — which owned and maintained the dam — did not have an emergency plan on file to give specific directions on how to address the situation.?

At the legislative hearing, Hatton said it was important to at least have a plan in case of an emergency. He said the state had already done much of the “heavy lifting” regarding the work needed for these plans and is ready to provide dam owners with prepared inundation maps and extra assistance developing such plans.?

Crittenden County emergency management officials ultimately decided to breach the dam with an excavator to prevent a potential failure, allowing for the water to drain out of the reservoir that was Marion’s primary water source. Since that breach, the small city has dealt with a water shortage and now faces expensive options to refortify its water infrastructure.?

Hatton said the situation in Crittenden County “worked out okay in the end.”?

“But having had a plan in place, I think, we would’ve responded more timely and effectively,” he said.