Council to Review Water Subsidies in New Year

The Pittsburgh City Council will hold a pair of Post Agenda meetings in January to hear from the Pittsburgh Water and Sewer Authority and the Pennsylvania American Water Company on the merits of ending the water rate subsidy for city residents served by Penn American. For more than 50 years the city has been making payments to various water companies serving areas of the city to the south and west of the Mon River. The subsidies lowered rates in those neighborhoods to equal the rates paid by city water customers. Councilman Patrick Dowd, who serves on the PWSA board, has introduced legislation in City Council to end the subsidy. “There is absolutely no reason why [a public entity] should be providing dollars to a private company,” says Dowd.

Council members whose districts are served by Penn American quickly came out against the idea saying many of their constituents cannot afford the higher rates. Dowd counters that his goal is not to raise rates, “I want to see those rates come down and I think first and foremost they should come down by the PWSA providing that water.” Dowd admits that there is no way to force Penn American Water Company to sell its system in the city to the PWSA. He says he hopes that ending the subsidy will be the first step to getting a deal done and he hopes those issues will be addressed in the hearings.

Council will hold two hearings on the bill. “We want to make sure that the company, Penn American, has an opportunity to talk unencumbered,” says Dowd, “I’m trying to be fair so I want to give them a chance to come in and say here is our story.” He says that should give council members a chance to think about all the issues involved. Pennsylvania American Water Company will go before the council January 11th at 1:30p.m. and the PWSA will go before council January 18th at 1:30p.m.

The contract between the PWSA and Pennsylvania American Water Company is up for its yearly renewal in February. Dowd says he is in favor of renewing the contract in 2011 but not in 2012. The legislation calls for the Mayor’s office to give notice to Penn American in August of 2011 that the city will not renew the contact in 2012. “We have a lot of time to think about that, we have a lot of time to talk to the private company, to talk to the PWSA, we have a lot of time to work on this. Its not like we are on a fast track here. We are trying to solve the problem long term.”

Penn American officials have said they look forward to serving the residents of the city for decades to come.