Companies Courting PWSA, But The Authority’s Really Just Focusing On Itself Right Now

Jul 19, 2018

As the lights went down in the O’Hara Township council room, Peoples Gas CEO Morgan O’Brien began narrating a short video he’d brought to chambers.

“The facility, as you’ll see, it’s a very modern look. It’s welcoming to the trails that we’ve depicted in this drawing to connect with the river development that’s going on,” he said. The video panned up to an aerial view. “You’ll see on the roof, the solar panels.”

It was the evening of July 3, the same day O’Brien and his company published an open letter to debut Peoples Water, a new entity to distribute water in the region. The water treatment plant imagined for O’Hara Township and featured in the video is central to that plan. But Paul Leger sees something different.

“There is no Peoples Water registered with the state at this point. There is no board of directors,” he said. “There is nothing but some glitzy things in the newspaper, which look too good to be true.”

Leger chairs the board of Pittsburgh Water and Sewer Authority. He doesn’t want to spend too much time talking about Peoples, because it’s just one of many companies interested in PWSA. All of them are doing their job, he said. Water is a good investment.

“It’s a commodity, and you can sell it. And that’s what businesses do,” he said. “They make money by selling stuff.”

The future of PWSA has been hotly debated for more than a year, sparked by concerns over high lead levels and poorly maintained infrastructure. Like most water and sewer systems in the country, PWSA needs a lot of work, and it's not going to come cheap. But through it all, residents have repeatedly called for the agency to remain a public asset.

Who owns the system matters, said Pittsburgh City Councilor Corey O’Connor.

“The public should own it,” he said. “Always, when you look at private companies, they’re trying to make a bottom line and we’re trying to provide services, and that’s the difference.”

Councilor Deb Gross, who is also a PWSA board member, made the same point.

“The assets of the city are there for the common good, not for corporate benefit or private benefit,” she said.

O’Brien has maintained it’s possible to do both. Peoples has what PWSA needs, he said: a large, well-run operation that can cut costs by attracting more customers through a broad, regional partnership. 

“We would be funding all new capital. No public monies will be going into this entity,” he said. “We would guarantee a cash flow stream to the city to pay off all [of PWSA's] debt.”

O’Brien said the partnership would also benefit consumers by lowering their water and gas bills. Gross contends that’s still an open question.

“You don’t know that, I don’t know that, I’m not sure the public knows that,” she said. “I think some people from Peoples Gas have said that.”

While Mayor Bill Peduto is set on PWSA remaining a public asset, he said the city is obligated to do what’s best for the ratepayer, and that competition could bring out some creative solutions.

“At the end of the day, I don’t know, and I don’t think there’s anybody out there who can say with pure certainty, this is the best idea,” he said. “Not until you’ve had the opportunity to look at all ideas.”

In a statement, a Penn American Water spokesperson said the company would be interested in buying PWSA if the city decided to sell; however, they’d like to see an open and transparent process that considers all outside options. Similarly, a spokesperson from Aqua Pennsylvania said the company would welcome the opportunity to support PWSA.

Leger said he's not surprised gobs of suitors have gathered under the proverbial windowsill of the city’s water system, fighting for its affections. Peduto has estimated some 20 companies have expressed interest. But every city and PWSA official was firm on one point: they’re not seeing anyone right now. When they want to get back out there, they’ll make it known.

“Because we know what we need,” said Leger. “Whereas a company that comes in and does full-page ads in the newspaper about the shiny building they're going to give us is telling us what we need.”

Both the city and PWSA would have to agree to put out a request for proposals. Those would go before council and the authority’s board. But at present, PWSA officials say they’re committed to replacing lead pipes, implementing a new water treatment plan and becoming, as its director says, a best-in-class utility.