Michael Klein discusses the Pennsylvania Supreme Court’s ruling on Aqua Pennsylvania Wastewater, Inc.’s (Aqua) proposed acquisition of East Whiteland Township’s wastewater collection system in The Water News Source. Because Aqua is a regulated utility, the transaction required approval from the Pennsylvania Public Utility Commission (PUC) through a Certificate of Public Convenience. Although Aqua agreed to freeze existing wastewater rates for at least three years, the Office of Consumer Advocate opposed the deal, arguing it was not in the public interest due to likely future rate increases and because the Township was already capable of providing reliable service. The PUC nonetheless approved the transaction, finding that its benefits outweighed the potential harms.

On appeal, the Commonwealth Court ruled that the PUC was erroneous in its decision, emphasizing the known harms of likely rate increases and concluding that Aqua failed to show that the transaction’s public benefits outweighed the harms. The Pennsylvania Supreme Court, however, reversed this move, holding that the Commonwealth Court failed to give proper deference to the PUC’s analysis. The Supreme Court stressed that rate impacts are only one of multiple factors to be considered, and that the PUC reasonably found substantial public benefits, including reduced operating costs, capital investment, regulatory expertise, and system improvements. While reinstating the PUC’s approval in principle, the Supreme Court remanded the case to the Commonwealth Court to address the separate, unresolved issue of whether the PUC’s factual findings were supported by substantial evidence, meaning the litigation is not yet finished.

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