Greater Harrisburg's Community Magazine

Capital Region Water says costs could increase, service deteriorate under privatization

Capital Region Water workers replace a water main on Swatara Street in Harrisburg last year.

Capital Region Water this afternoon issued a response to Harrisburg’s proposal to sell the municipal water and sewer system, saying that privatization often has led to higher prices for consumers.

In a statement, CRW said that customers could experience higher bills and reduced service if the system were sold to a private entity.

“Given that most research shows rates increase approximately 60 percent when similar publicly-owned utilities are privatized, it is difficult, especially at this early stage, to understand how a plan like this benefits ratepayers,” said the statement, credited to “Capital Region Water and its board of directors.” “When ownership and operational control of water and wastewater systems remain local, customers experience better customer relations, better rates and higher quality products and services.”

CRW did not cite the source of the research.

This morning, TheBurg broke the news that the city had issued request for information, asking qualified private entities to indicate their interest in potentially buying all of the city’s water and sewer assets.

Companies have until Sept. 16 to respond. Interviews would be held the following week, possibly followed by a more formal bidding process.

In an interview last night, Mayor Eric Papenfuse told TheBurg that the move was prompted by the city’s loss of confidence in CRW’s ability to manage complex infrastructure projects, as well as his objection to a proposed stormwater fee, which CRW hopes to implement beginning Jan. 1.

“This [request for information] is to explore interest,” he said. “We may or may not decide to do it.”

In its statement, CRW defended its actions since its formation more than six years ago, when it took control of the city’s water and sewer system from the discredited Harrisburg Authority.

“Since 2013, Capital Region Water has been working to advance a plan that is fair and equitable to ratepayers while also meeting state and federal regulatory clean water requirements,” CRW said. “And we’re making progress. You can see investments and improvements made in every corner of our city and throughout our system regionally.”

CRW expects to spend more than $300 million over the next 20 years to meet EPA-mandated improvements to reduce the flow of wastewater and pollution into area waterways. The utility is currently under a federal consent decree to stem pollutants.

Perhaps most visibly, CRW has implementing catch basins and green areas around storm drains as part of the 3rd Street corridor project.

“We need to build on this good work and continue with a community-based approach that restores our failing infrastructure, improves the health of our local waterways, and beautifies neighborhoods across Harrisburg and surrounding communities,” according to the statement. “As we always do, we look forward to working with the mayor and city council on our shared priority to ensure our communities grow and thrive.”

Read the city’s request for information.

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