Community Legal Services Sues Over Water Rate Increases
Community Legal Services has filed suit challenging the Philadelphia Water Commission’s method of setting new, increased rates in its 2008 Rate Increase Case. In filing a suit in the Philadelphia Court of Common Pleas, CLS is acting in its role as the City appointed Public Advocate. CLS also is representing two consumer organizations, Action Alliance of Senior Citizens and the Tenant Union Representative Network (TURN).
Philip A. Bertocci, the lead CLS Attorney on the lawsuit, said the Water Department ignored the recommendations of a Hearing Officer and violated the law in setting the new rates. “If the Water Department’s goal is to set affordable rates, as required by state and local law, and even by the federal Constitution, then the rates must be based on solid evidence, not on inherently speculative long term projections.”
Bertocci said that previous rate increases were supposed to be kept at low levels through the use of a Water Department fund created to stabilize future rates, but the fund has not been used. “In the 2004 Rate Increase Case, the Water Department claimed that it needed a substantial rate increase, and that even with that increase, it would have to spend the $129 million Rate Stabilization Fund down to $14 million by the end of 2008. Instead, by the end of 2008, the fund contained an astounding $160 million. The Water Department converted a fund meant to stabilize rates at the lowest possible level into a fund for stabilizing rates at ever higher levels.”
In this lawsuit, CLS, Action Alliance of Senior Citizens and TURN have challenged the Water Department’s methodology, arguing that it is overly dependent on unverifiable long term projections. The Water Department is the only major utility in Pennsylvania that uses this methodology. The Pennsylvania Public Utility Commission, which regulates many gas, electric and water utilities, including the Philadelphia Gas Works, has rejected this methodology as illegal under the state’s Public Utility Code. In a recent case involving PGW, the Commonwealth Court of Pennsylvania unanimously upheld this rejection.