In the last few weeks there have been a couple of good articles about Aqua’s plans to raise rates. They’ve asked the state PUC for approval to raise water rates by 17% and wastewater rates by 33%. WHYY covered it here and the DelCo Times story is here. These articles have many quotes from Aqua defending their reasons for these steep rises. But the company’s annual report tells a different story,
Essential reported total operating revenues of $1.46 billion in 2020, an increase of 64.4% compared to $889.7 million in the prior year. The acquisition of Peoples in the first quarter contributed $520.9 million of this revenue growth, while the remainder was due to rate and surcharge increases, increased volume and growth in the regulated water segment. Water usage was up 0.8% year over year due to the work-from-home orders and favorable weather. Adjusted revenues for 2020, which exclude water and gas rate credits issued one time to utility customers, were $1.49 billion (non-GAAP).
Operations and maintenance expenses were $528.6 million for 2020 compared to $333.1 million in the prior year. The increase in operations and maintenance expenses was primarily a result of operations and maintenance expenses of $199.9 million from the acquisition of Peoples.
Note that Aqua America seems to have renamed itself to Essential Utilities as its now also in the natural gas business. If you do the math here, you’ll note that if you subtract the maintenance from the acquisition of People’s, Aqua actually spent less in operations and maintenance last year. Those increases from “rate and surcharge increases, increased volume and growth” added around $50 million to their revenue last year despite falling operating costs.
Essential reported a net income of $403 million, so almost 30% of revenue or an increase of 7.5% in 2020. So they don’t seem to be hurting. Certainly not as much as their customers are during the pandemic.
This is of relevance to Garden City because, as the articles above state, Essential Utilities is pressing ahead with its attempts to purchase Delcora – DelCo’s wastewater system – and the Chester Water Authority, the water utility that serves Garden City currently. Both seem to remain locked in protracted court battles. Our township commissioners have also talked about selling our township’s sewer infrastructure to Essential Utilities. If all these transactions are allowed to go ahead, we too could be facing hefty 33% rises like the ones above to better pay Essential Utilities investors.