Customers of a shoddy rural water company need relief — and fast, stakeholders say. A judge is mulling next steps

Yahoo

15-02-2025

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BELLEFONTE — A distressed rural water company whose customers have endured more than a decade of shoddy service should be put under new management as fast as possible, various local and state stakeholders agree.
But as a nearly three-hour hearing Friday before a public utilities judge showed, the solution could be complicated.
'I'm trying to strike a balance between urgency and getting this right,' Administrative Law Judge John Coogan said during the proceeding.
The Pennsylvania Office of Consumer Advocate, the Department of Environmental Protection, and the company's own lawyers support an immediate emergency takeover of Rock Spring Water Company to protect the health and safety of its roughly 1,000 customers in rural Centre County.
The privately owned water company — which has a history of unreliable service, dozens of regulatory violations, and tens of thousands of dollars in unpaid civil penalties — is under investigation by state regulators. The Bureau of Investigation and Enforcement, an independent division within the Public Utility Commission, launched a review of the company last fall.
The process, which will ultimately decide whether Rock Spring should be forced to sell, is lengthy, with no guaranteed outcome. As part of the review, a two-day hearing is scheduled for late April.
But customers who rely on the 20-mile water system and its deteriorating infrastructure can't wait until spring, the consumer advocate argued in an emergency ask to let another provider take over interim service operations, which prompted Friday's hearing.
'Without water service, the public health and safety of Rock Spring customers will be compromised,' Melanie Joy El Atieh, a deputy consumer advocate, wrote in the filing.
The DEP, which monitors drinking water safety, approves of the effort. The state agency has been in a yearslong legal battle with Rock Spring over excessive water loss.
In a legal filing, the department cited several violations against Rock Spring owner J. Roy Campbell — including for letting a leak go unfixed for six months, failing to protect the system's water source, and shutting off service without proper notice — and noted that Campbell and his daughter Elizabeth are 'incapable' of running the system.
The request to appoint a temporary operator — also known as a receiver — was heard by Coogan, who said he expects to issue a decision on the matter sometime next week. The deadline for his order is Friday, Feb. 21.
The Office of Consumer Advocate identified three possible utilities capable of taking over Rock Spring's system: Pennsylvania American Water Company or Aqua Pennsylvania, which are both privately owned, or the municipal-run State College Borough Water Authority.
The State College Borough Water Authority has emerged as the likely candidate to handle service, both in the interim and as an eventual buyer. The municipal entity has existing water lines close to Rock Spring's system.
Also, in December — after persuasion by his attorneys, according to legal filings — Campbell signed a letter of intent to sell the business to the State College authority for $65,000.
Pennsylvania American's lawyer said appointing State College as the temporary operator is the best way to provide relief to customers.
State College Borough Water Authority Executive Director Brian Heiser said the municipal entity is willing to take over operations for Rock Spring, which would be treated as a standalone system unless formally acquired.
But it has conditions.
In legal filings, the municipal authority said it's unwilling to become the receiver if it's required to operate under the PUC's jurisdiction and regulations. It also doesn't want to be held liable for damages from Rock Spring's current conditions or be required to use its own funds to make system improvements.
The water authority is asking the PUC to recommend it become the receiver, which could create a path for a Centre County judge to approve the request.
James Bryant and Carolyn Larrabee, Rock Spring's lawyers, filed an emergency request in Centre County court recently, asking a judge to hand over interim operations to the State College authority. But the request was denied, with the judge finding he did not have the authority to usurp the PUC's powers — though he did note the lawyer's argument over the commission's authority was broad.
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