"Wealthy people who invest their money through these investment firms have decided that these small rural water companies offer a great opportunity to make some money," Frederick said. "They want to squeeze more profits out of the cash flow." First public hearing scheduled July 28 at the state Capitol
Note: We know of at least one investor-owned water utility in the area that could use a good investigation . . . it is long overdue. If you agree, please let Senator Watson know your feelings.
Austin American-Statesman | By Asher Price June 30 2011 – A group of Texas senators, led by state Sen. Kirk Watson , D-Austin , will investigate water and sewage rate increases by investor-owned utilities affecting thousands of people across Texas, including those in subdivisions in Travis, Hays and Williamson counties.
The decision to investigate rates comes after Monarch Utilities , a division of California-based SouthWest Water Co. , filed an application in late May to raise rates beginning Aug. 1 for water and wastewater customers.
Once the rate increase goes into effect, a typical Monarch customer could pay rates that are more than twice as high as those for the average water utility customer in a Texas city , according to Watson's office.
Aqua-Texas, Incorporated (ATI) is well known in small towns and villages in Texas. The Parent Corporation is Aqua America and they go around the country buying up small water supply systems that the towns or private companies can no longer afford to run. They claim to serve more than 155,000 residents in 365 communities in 51 counties across Texas. It is a legal enterprise but their customers often get slammed with exorbitant costs. I believe that to be our case, how about you?
How to Fix Your System for Free, Save 80 Megagallons and Make$$$$$ in the Process
One thing about Aqua-Texas, Inc. (ATI) that has angered more people out here in the “Cedar Barrens” besides their excessive water/sewer bills, is their wasting of our groundwater water in the City of Woodcreek and Woodcreek North. Almost half of the water that ATI pumps up from the Trinity Aquifer is lost or wasted by leaks in their pipes and lines.
The amount of our precious groundwater from the Trinity aquifer that they waste has been documented at 80,000,000 gallons per year. To put that amount into perspective; it could supply the water needs of about 2000 homes and families for an entire year.
The government agency with the proper jurisdiction over ATI’s pumping is the Hays Trinity Groundwater District (HTGCD). The former Board was ineffective in dealing with ATI even though the leaks are a violation of Texas water laws. Just recently, the newly elected Board's President, Jimmy Skipton made a heroic but uncertain move in the right direction. Skipton is finding out that many obstacles still exist and tempers are on a hair trigger. Communication is difficult when emotions are so high.
At the November 18, 2010 Board meeting of the HTGCD, it was announced that ATI has made an “offer” to fix their leaks. The large crowd of citizens was deservedly suspicious but listened to the thing unfold. President Skipton did a fairly credible job of presenting the “offer”, but nothing was presented to the public in writing.
ATI’s “offer” is that they will fix the leaks that they estimate to cost about $5 million, which they will pay for. In return they want to hold onto the rights to and the 80 million gallons of water they were previously allowing to leak into the ground, for future system expansion. Now for the punch line, ATI will recoup its $5 million “investment” by opening a Rate Case with the TCEQ so they can bill their customers for the full amount over some 5 years or so. Aqua couldn't or wouldn't say how much it would cost per household.
They haven’t done squat since 2003. Why have they waited all these years and now you want to deal, what could be the reason?” Could it be that they see more development potential (The Ridge at Wimberley Springs) and know they have no chance for and increase in pumping due to the public outcry over their 80 million gallon/yr. loss of groundwater. Over the past 7 years that works out to 560 million gallons. Being able to keep the pumping of 80 million gallons/year is a way of increasing their pumping potential without asking the HTGCD for more pumping. It will probably stop the leaks but it goes without saying that no water will be saved, it will be sold. It is important to note that they could still waste as much 15% of their total pumping (aprox. 25 Megagallons per year.)
12/4 Update:I have learned directly from ATI that the proposed plan would include a requested 3-year pumping permit with no increase in the amount of water pumped. They will repair the leaks to comply with Rule #9 (15% Loss) at an estimated $5 million total cost for both Woodcreeks. And best of all, they want to keep the 80 Megagallons to sell. They will open a Rate Case before the TCEQ to recover that amount from their Customers. They expect the process to take about 5 years. I suspect much longer ;)
The exact amount expected to be paid by the citizens for the repairs will be somewhat complex due to the differences between the rate structures of the two Woodcreeks. This will necessarily be a separate process for each entity. The City of Woodcreek (phase I) is on a negotiated rate structure that allows them to have a slightly lower base rate for water and wastewater service. Woodcreek North (phase II), being an unincorporated subdivision has a rate structure based on a previously granted Southwest Regionalization.
Note: The following Values and Calculations are not spelled out in The ATI "Offer" and are therefore my guestimates.
Since the TCEQ allows ATI to directly recover their costs for Capital Improvements by billing their customers, there are significant differences as to what the customers in two Woodcreeks would pay. Using approximate values, let’s say that both the City of Woodcreek and Woodcreek North each have 800 customers. If ATI spends $2.5 million on Capital Improvements (repairs) in the City of Woodcreek (Phase I), each customer would be on the hook for an astounding $3125 or an unaffordable rate increase of $52.08 per month over 5 years.
If a similar $2.5 million were spent in Woodcreek North (phase II), each customer in the Southwest Region of 13,000 customers would have to pay $192.31. Spread out over about 5 years, that is an increase of $3.21 per month. You can see that while the City of Woodcreek has ‘enjoyed’ slightly cheaper utility bills for the last few years, they will be at a distinct financial disadvantage when leaks are repaired. They will likely have to renegotiate their rates and become part of the SW Region or try and secure an injunction via court action. The City could eventually try an acquisition of the system by eminent domain. All of their options will be very expensive and fraught with risk.
These charges will not likely show up in bills for at least a year, as they and can only be billed after the repairs or sections of repairs are completed and approved by the TCEQ.
Our neighbors in Kerrville and elsewhere within the Southwest Region would also see rate increases as part of the shared costs within the Southwes Region. While this is legally right, it seems MORALLY WRONG.
These leaks have been present since at least 2003 when Aqua America Inc. (know then as "Philadelphia Suburban Corp.")purchased the system from AquaSource. In the previous seven years Aqua has done nothing to fix their leaks. No one has been able to force them to fix their leaky system and they certainly have not volunteered to do so. ATI bought a “pig in a poke” and failed to check the “pig”. Now they want their customers to pay for their lack of due diligence.
Woodcreek Residents were a bit unhappy with the "Offer"
The crowd did not find the "offer" very palatable and some like myself voiced their concerns. President Skipton and other Board members seemed a little surprised at the intensity of the objections, but they should have known that it wasn't going to go down easy. No one on the Board is a customer of the infamous Aqua-Texas Incorporated but many in the audience obviously were. Hays County Commissioner Will Conley was there and did speak but his words were a little superficial as you would expect from a politician not wanting to incur the wrath of his constituents. This is a very touchy subject for the property owners in the Woodcreeks. Some talk about a committees or citizens groups to work on this near impossible situation was mentioned but no firm plans were revealed.
If this entire proposal is approved and executed,
Aqua Texas a.k.a. Aqua Utilities will have;
an additional 80 million free gallons of water/year to sell.
enhanced sales potential due to more a favorable climate for additional development.
fixed their leaky system substantially increasing its value, at no cost to them.
the HTGCD, TCEQ and the Public will be off of its back for wasting water.
a 3-year uninterupted pumping permit to allow for increased expansion and contracting.
The Customers will have;
increased water/sewer bills.
some further lowering of their property values.
knowledge that most of the 80 million gallon leaks have stopped however, now ATI can sell the water and gain increased revenues.
increased development in the area, therefore more pressure on the aquifers.
construction inconveniences and water interruptions for about 5 years
no guarantee that Aqua will not ask for further rate increases during their 3-year permit period.
Although I feel that everything here is true, it is the responsibility of the reader to do his or her own research before arriving at their own conclusions about the veracity of any statement(s) herein. Everything contained within these pages is protected speech guaranteed by the United States Constitution. So There!
"While the extraordinarily high water bills are a major problem with Aqua TX, one must really take into account that the bigger underlying issue is that Aqua TX has such a bad reputation in the Hill Country that it is ruining the property values of the local homeowners. I decided to sell my home in Woodcreek because of Aqua TX. It finally sold after listing it several times over several years, but I had to sell it for quite a bit less than I paid because of Aqua TX. I had five potential buyers in the past 6 months who wanted the house, but after reviewing the information about Aqua TX, decided to buy elsewhere to avoid the high cost of water with Aqua TX. I was lucky to find a buyer willing to go ahead with the purchase in spite of Aqua TX, but you can bet I will make certain Aqua TX is no where near any neighborhood I buy into in the future. I am sorry for those of you who are stuck with them and wish you the best in ousting that vermin from our State. Aqua TX is horrible!!!"
April 27, 2010 by Alana Scott in Wimberley, TX
AQUA SUCKS!!!!
"I recently moved to the Woodcreek North area in Wimberley and I can not believe that my water bill is $130 before I use ANY WATER!This is RAPE!I work my ass to provide for my family and NOW what am I supposed to do,go on welfare because I am spending more $ on water.I'd like to know what "improvements" Aqua has made here,because the water taste like shit and it smells like wet dog,it's not my home because I don't own dogs!I just can't believe that this is legal.All I know is that it is pretty sad when I have to pay these outrageous prices for water and I don't even use that much in my home. What's even worse is that we as Aqua customers have to pay to pay our bill on line or by phone. All I have to say is there has to be a way around this RAPE of TX residents through this water company who is based on the EAST COAST,they are not even local.Why can't we use the same water company that Woodcreek South uses?How can they make us pay these outrageous amounts.This is BULLSHIT in TRUE FORM"
March 05, 2009 by Sen in Wimberley, TX
Aqua Texas - RIP OFF!
"We have Aqua Texas out here in wimberley for sewage and water. I have never in my life felt so enraged about getting ripped off for a service. Our base water is $40 before we even use a drop and the sewage is $90! I live in a 1200 sq ft condo with no yard and am paying the same water rates that the people who own large homes and big lots that use 4 to 5 times as much water as i do. I wish there was a way to burn their sorry asses into the ground and take them for everything they have, so that they know what it feels like! They say they have made improvements, but their have been none. They run the sewage for thousands of people on a 2" pipe, when they should be on a 10" or 12". PEC was exposed out here and paid dearly for it, its been long past due for Aqua Texas to have their actions paid for. DAMN TO AQUA TEXAS!"
"Wealthy people who invest their money through these investment firms have decided that these small rural water companies offer a great opportunity to make some money," Frederick said. "They want to squeeze more profits out of the cash flow."
First public hearing scheduled July 28 at the state Capitol
Note: We know of at least one investor-owned water utility in the area that could use a good investigation . . . it is long overdue. If you agree, please let Senator Watson know your feelings.
Austin American-Statesman | By Asher Price June 30 2011 – A group of Texas senators, led by state Sen. Kirk Watson , D-Austin , will investigate water and sewage rate increases by investor-owned utilities affecting thousands of people across Texas, including those in subdivisions in Travis, Hays and Williamson counties.
The decision to investigate rates comes after Monarch Utilities , a division of California-based SouthWest Water Co. , filed an application in late May to raise rates beginning Aug. 1 for water and wastewater customers.
Once the rate increase goes into effect, a typical Monarch customer could pay rates that are more than twice as high as those for the average water utility customer in a Texas city , according to Watson's office.
Juli Williams, of Raleigh, North Carolina, has five daughters. Three are in college and two are in high school. She holds a full-time job as a personal assistant. Her husband is on unemployment.
In short, Ms. Williams has her hands full.
But she somehow remarkably has had time to spearhead a grassroots campaign to oppose Aqua America, one of the nation's largest for-profit private water utilities, in its bid to win approval for a water rate increase before North Carolina's public utilities commission this year. Right now, she is organizing homeowners associations across the state to speak and protest outside of 6 public meetings that will occur next month. She is online, in her car posting flyers, on the phone raising early awareness, and directing many to an online petition set up on Change.org by the Hampton Ridge Neighbors, one affected homeowner group.
Why would a mother with this much on her plate take on this issue?
It's because she has to.
"The water bill, it can make or break us on some months. We cannot even budget for it—it's like a constant fear in your side waiting for it to come," she says. In the summer months, it can be more than $200. It is usually higher than her light bill. She has had neighbors come to use her shower after their water was cut off, after being only 10 days late paying their bill, which they couldn't afford. She has had enough.
So have many other Aqua North Carolina customers.
As I detailed in a previous post, the 88,000 customers in Aqua North Carolina's water and sewer service territory often have a monthly bill that's twice has high as families just miles away, who are served by publicly-owned utilities in the state. Now, for the 2nd time in three years, Aqua North Carolina wants to raise its rates–water by 20 percent and sewer by 16 percent.
The company says it does not make its "legally-allowed level of profit," but its reputation as a 'water profiteer' leads residents to be skeptical of these claims to say the least. As the Charlotte Observer reports, the industry is known as a "rate case machine": its business model depends on raising water rates for existing customers to pay for new investments. Wall Street analysts say Aqua America is one of the best-performing water utilities in the nation.
Nationwide, Pennsylvania-based Aqua America has one million customers. The corporation's tactics have been slammed in a watchdog report and its constant rate increases have brought protests everywhere from Austin, Texas to Long Island, New York. In fact, New York Senator Chuck Schumer (D.) has called for a federal investigation of the company, which has had soaring profits while it lobbies for rate increases across the nation and accepts federal dollars.
Aqua Utilities' Pasco customers fighting water rate increase
ANTHONY ALLRED/STAFF
Don Simonson waters the bushes on his front lawn of his Port Richey home. You can see he is standing on his gravel lawn. He said someone else took out the grass and layed the gravel before he moved in 10 years ago. Simonson says he is so frustrated with Aqua Utilities that he's thinking about having the bushes removed so he doesn't have to water them. He said every time he waters the bushes he feels like he's taking a hand full of money and throwing it all over the bushes. He moved to Port Richey from Chicago with his now deceased wife 10 years ago to retire.
ANTHONY ALLRED/STAFF
Charlie Skelton looks over some dried up plants in his front yard. his whole yard is dried up and full of lifeless plants. Skelton is very unhappy with Aqua utilities.
PORT RICHEY - Charlie and Marie Skelton used to have a lush green lawn, and flower beds and a succulent garden bursting with fat aloe vera plants.
But today, their yard is a desert of sand and weeds. The flowers are long gone, and even the aloes are shriveled up and brown. Like most of their neighbors in Jasmine Lakes, the Skeltons stopped watering their yard about the time Aqua Utilities took over their water and sewer service.
Aqua customers pay some of the highest water and sewer rates in Florida – two to three times what neighboring communities charge. And they're about to get even higher if the Florida Public Service Commission approves the company's requested rate increase.
"I'm surrounded by water, and I've got the highest water prices around," Skelton said.
He and his wife routinely pay more than $100 a month for water and sewer service. Aqua Utilities doesn't allow customers to install separate irrigation meters, which would eliminate sewer fees for water that goes directly to the sprinkler system. So Skelton and many of his neighbors simply disconnected their sprinklers or covered their yards with gravel.
Don Simonson has a gravel yard and he's thinking about removing a row of hedges – the only green thing left in his yard. "Every time I water them, I feel like I'm just throwing money away," he said.
In neighboring Palm Terrace and across the county in Zephyr Shores, the rates are even higher. Linda Trautmann, who lives in Palm Terrace, lives alone and conserves water, but her monthly bill fluctuates between $85 and $90, and "it's not fit to drink."
If Aqua's rate increase goes through, her bill would easily exceed $100. The same is true for Roz Angelini, who also lives alone and even switched to low-flow toilets. She's still irked that Aqua wouldn't pay the $100 rebate like publicly owned utility systems.
"You can try to save water, but it doesn't make any difference," she said. "Anything you do to lower your water bill – they just raise the rates."
* * * * *
Aqua Utilities' parent company, Aqua America, is the second largest privately traded water and sewer company in the United State, with operations in 13 states. The company serves 3 million customers, including 117,000 in Florida. It's also one of the most consistently profitable corporations in the nation, having paid quarterly stockholder dividends for 65 years without interruption. "They're an investor-owned utility – just like Progress Energy and Verizon," said Bruce Kennedy, utilities director for Pasco County. "They're in business to make money."
Aqua Utilities makes money even when its customers don't use any water. The company charges customers in its three Pasco County service areas a $50 facility charge before they use the first drop of water. It's a billing strategy that keeps the money flowing in communities with a large number of seasonal residents.
"What this company is doing to these people is very unfair," said Frank Reams, a retired customer service manager for a telephone company. "They charge customers a $50 monthly facility fee even when they're not in the house."
A cofounder of Friends of Locally Owned Water in Florida, or FLOW, Reams is volunteering his time to help Aqua customers fight the rate hikes. Reams said the company's customer service record is appalling. "The PSC regulates 160 water companies in the state of Florida," he said. "This company accounts for 47 percent of the total complaints."
In February, the Florida Department of Environmental Protection cited Aqua Utilities' Palm Terrace sewer treatment plant for being "significantly out of compliance." Inspectors found dozens of violations, among them "solid waste was observed in the southern pond, and large solids were at the surface of both ponds."
Inspectors noted: this is a repeat item.
Company spokeswoman Gretchen Toner said she couldn't comment on the inspection report other than to say, "We are in compliance and our folks are addressing the issues in the letter."
Pasco County Commissioner Jack Mariano hosted a town hall meeting for Aqua customers earlier this month in Jasmine Lakes. More than 400 people attended.
Mariano is helping organize a bus trip to Tallahassee for the PSC's May 24 meeting. The commission is scheduled to rule on the rate case.
On March 11, Pasco Commissioners unanimously adopted a resolution opposing the rate increase. Mariano said Aqua's facility charges are already 237 percent higher than Pasco County's charges. "These people can't afford it," he said. "Imagine being a single lady on a retirement income who used to pay $40 a month, and now you're paying $150."
* * * * *
The PSC approved a rate increase for Aqua Utilities in 2009, but the company applied for another increase a year later. In the application, Aqua executives said they need the rate increase to pay for $12 million in capital improvements. Another reason is that since the 2009 rate increase, Aqua's customers have reduced their water consumption by some 16 percent. Hundreds of customers have installed private irrigation wells – including 136 in one community.
"Faced with these dire conditions, the company has no choice but to seek timely rate relief," Aqua attorney Bruce May wrote. In a letter to PWC Chairwoman Nancy Argenziano, May wrote that the company's anticipated 10-percent profit margin would drop to 1 percent without the rate increase.
"The PSC guaranteed them an 11 percent rate of return," Mariano said.
Mariano wants a law that ties the company's profits to its water quality and service. If people have poor water quality, the PSC could lower their rate of return to zero.
Aqua Utilities Florida makes up just 4 percent of the company's overall assets, and its sudden drop in revenues has had little effect on the bottom line. Aqua America posted $124 million in profits last year – a 19 percent increase over 2009.
CEO Nicholas DeBenedictis called 2010 "one of the most successful financial years of my 19 years with the company," in a news release.
In an interview Friday, Toner said the company's overall health doesn't reflect the situation in Florida, where the company netted $176,00 last year. "We're just a little bit above breaking even," she said. "And we can't operate at a loss."
She said that utilities in each state operate independently, and the parent company does not shift funds from one state to another to pay for capitol improvements. In Florida, many of the systems Aqua purchased over the years needed substantial repairs.
"The systems had been neglected for some time," Toner said. "And consequently, the customers hadn't had a rate increase in a dozen years."
So far in 2011, the company has received rate increases in other states that will bring in an additional $6.8 million in revenue, a news release stated. The pending rate cases in Florida and other states could bring in another $26.6 million.
Skelton said he'll be taking the bus trip up to Tallahassee in May.
"This is like a gold mine for them," Skelton said. "It's a monopoly." lkinsler@tampatrib.com (813) 259-8109
Sunday, March 20, 2011
The stories about shady business practices at Aqua America (in Texas, Florida, North Carolina, etc.) just keep rolling in.
In our own state, the regulator for the TCEQ whose job it is to decide rate increases is MARRIED to the head of Aqua Texas for our area.
This certainly brings new credence to the notion of government "being in bed with" business in Texas!
Ethics complaint filed against Florida water rates regulator for socializing with Aqua America employee while negotiating their rate increase request
An ethics complaint has been filed against Florida Public Service Commission Chairman Art Graham for allegedly socializing with officials from a water utility that has a rate increase case pending before the commission.
Frank Reams, a Zephyrhills resident, said in a complaint filed Tuesday with the Florida Commission on Ethics that Graham spent an hour conversing over drinks with Aqua America Inc. regional president Christopher Franklin and regulatory counsel Kimberly Joyce.
They were talking in the Renaissance Hotel lobby on Feb. 15 during a national Association of Regulatory Utility Commissioners Conference in Washington, the complaint states.
Bryn Mawr, Pa.-based Aqua America's subsidiary Aqua Utilities Florida Inc. has about 16,000 customers in 17 Florida counties, including roughly 1,200 Lake Osborne Estates residents west of Lake Worth.
The company doubled Lake Osborne's rates in 2009 and is seeking another 30 percent increase this year.
Graham could not be reached for comment Thursday.
Reams said Graham did not attend customer meetings the PSC held in October in half a dozen cities where customers asked that the rates not be raised. He filed the complaint after reading news reports that stated Graham and Aqua officials talked for an hour.
While he is not an Aqua customer, Reams said a couple of people at his church are and he became concerned because they cannot afford to pay more for water.
"They have a pending case. They will be deliberating on the 24th of May. We hope to have a bus-load of people at that agenda conference," Reams said.
Graham, a former Jacksonville city councilman, was appointed to the commission in July.
Florida law states that a commissioner must avoid impropriety in all of his activities and must act at all times in a manner that promotes public confidence in the integrity and impartiality of the commission.
The Commission on Ethics will set out to determine whether the complaint indicates a possible violation of any law. If so, its staff will start an investigation.
Aqua Texas, Woodcreek's overpriced monopoly water supplier, is the poster child for water privatization in America today. Food and Water Watch uses Aqua America, Aqua Texas's parent company, to show how it is done...to you.
Executive Summary
Aqua America is the second largest publicly traded water and wastewater corporation based in the United States. It has pushed its way to the top through a strategy of aggressive acquisitions and drastic rate increases.
Aiming to make several dozen acquisitions a year, the company targets smaller systems to avoid a citizenry armed with resources to fight the takeover. And it pursues systems in states that have fast growing populations, corporate friendly regulatory environments and considerable investment needs.
Of course, all of this is done with an eye toward its bottom line.
Not long after taking over a system, the company begins its almost continual process of increasing rates. In just the first nine months of 2007, the company increased rates in nine locations. It has nine additional rate increases pending and plans even more over the course of 2008.
While families see skyrocketing water bills, the company sees booming revenue growth: 13 percent in 2007 alone. But rather than reinvesting all the money from community bills into improving their water and sewer systems, as a public utility would do – the company is delivering solid returns to its shareholders.”
Discontent is growing among its customers, and many communities are beginning to speak up. In some cases, they even are kicking out Aqua America and reclaiming public control over their vital water and sewer infrastructure.
Aqua America is failing to protect the public interest. Instead of private control of their water systems, communities need a national trust fund for clean and safe water. Federal support for public utilities will do what Aqua America has not done: A trust fund will help ensure families across the country have access to clean, safe and affordable water.
Juli Williams, of Raleigh, North Carolina, has five daughters. Three are in college and two are in high school. She holds a full-time job as a personal assistant. Her husband is on unemployment.
