A regional public partnership, not a push to privatize, is a better bet for Chester water customers | Editorial

A joint purchase of the water authority by Delaware and Chester Counties would provide financial relief for beleaguered Chester City while ensuring the utility's public ownership.

The move to sell off the Chester Water Authority is a part of a statewide trend, writes the Editorial Board, one that often results in big payments to local governments and big bills for customers.Read moreElizabeth Robertson / Staff Photographer

by The Editorial Board

Published May 22, 2025, 5:00 a.m. ET

America has long been known for its dedication to free enterprise. As President Calvin Coolidge once said: “[T]he chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.”

That prosperity, however, is not solely the product of entrepreneurs like Bill Gates or Philadelphia‘s own John B. Stetson. It relies on a network of public institutions and public utilities. Education, public safety, transportation, and water have long been provided as government services. Residents and businesses alike have relied on these public entities as they have built their lives and livelihoods.

The last decade has seen that ecosystem disrupted in Pennsylvania as private companies have gained control over local water utilities. After big payments to local governments, residents get stuck footing the bill — in many cases, rates have doubled or tripled.

The city of Chester, financially distressed for decades and having declared bankruptcy in 2022, is the latest local government to fall under the water privatization spell. Selling off its water system is one of the most viable ways to balance the city’s books and restore normal governance.

However, the Chester Water Authority’s fate is now in the hands of the Pennsylvania Supreme Court. The dispute is whether the city, which owns the authority, or the authority’s board — which runs the utility and includes representatives from customers outside Chester — has the right to decide on a sale.

The move to sell off the city’s water system is part of a statewide trend that began in 2016 when lawmakers passed Act 12 — the state law that effectively changed the valuation process for the utilities across Pennsylvania.

Privatization advocates often present selling a utility as a way for municipalities to garner revenue without spending money or raising taxes. Many municipalities have aging water systems, and updates are expensive. For local officials tired of defending tax hikes, the deals offered by the water companies can sound like a lifeline. After all, what county couldn’t use an extra $1.1 billion, which was Aqua‘s offer for Bucks County Water and Sewer?

The issue is that this money isn’t free; shareholders will expect it to come back to them in the form of robust dividends. As a result, for customers, these new water rates end up costing much more than any tax increase.

The private water companies often claim that rate increases are needed to invest in maintenance and modernization of existing systems, but upgrades do not appear to be as much of a concern for either Bucks County Water and Sewer or the Chester Water Authority, which are well-regarded agencies with highly rated water quality. Purchasing these utilities can provide a return to shareholders much faster than systems that require millions of dollars in infrastructure upgrades.

There’s evidence that Pennsylvanians are tired of these water privatization efforts. On Tuesday, Pittsburgh overwhelmingly voted to ban the sale of its city’s water authority, Pittsburgh Water.

Still, faced with decades of budget shortfalls and state management, selling off the water system, which mostly serves customers outside of Chester itself, seems like an ideal solution to many in Pennsylvania‘s oldest city.

In time, however, Chester residents will also suffer from the choice to privatize the water authority. After all, their rates will also likely rise under privatization, leaving them paying more each year for the exact same water as before.

Instead of selling to a private company, Chester should explore a regional public partnership.

Gov. Josh Shapiro has rightly criticized the private equity-engineered downfall of hospital systems like Crozer. If the state government worked with Delaware and Chester Counties on a joint purchase of the water authority, it could accomplish the goal of providing needed cash to Chester City while ensuring public ownership of the water authority.

Rather than generating enough revenue to reward shareholders, the authority would be charged with the more affordable challenge of recouping the costs of the bond.

Lawmakers should also consider making changes to Act 12 by limiting how much companies can increase rates each year. Otherwise, Pennsylvania risks the ignominious distinction of being a place where alcohol is sold by the state while water is controlled by private companies.