COMMENT LETTERS: Different views on proposed acquisition of Jefferson Utilities

Deerfield Village is a neighborhood consisting of 48 homes located approximately two miles south of Shepherdstown. On behalf of the board of directors and the residents of Deerfield Village I want to alert the Public Service Commission that Deerfield Village protests this case.

Deerfield Village residents have been customers of Jefferson Utilities Inc. since homes were built in our community in approximately 2006. For more than 10 years all households in this community have paid a $12 monthly surcharge on their water bill. This surcharge was established to replace leaky pipes and provide meters to homes in other communities owned by Jefferson Utilities Inc.

Our understanding is that these repairs were completed many years ago. Despite this, we have continued to pay the surcharge. As customers of Jefferson Utilities Inc., Deerfield residents already pay an exuberant price for water. According to research firm Statista, West Virginia residents pay the highest average prices for water in the USA.

The current proposed sale will lead to an increase in our water rates of 57 percent, according to what’s been published about this case. Water is a necessary resource. It is debatable as to whether or not this resource should be in the hands of a for profit corporation. As customers of Jefferson Utilities Inc., we don’t have the luxury of switching to a different water company.

WV American Water Company does not have the best interests of the citizens of Jefferson County, West Virginia, or America in mind as part of this acquisition. As a for-profit company, the shareholders of WV American Water Company are the only entities they care about.

We understand the sale price of $32 million is roughly 2.5 times the valuation of Jefferson Utilities Inc. just a few years ago. We further understand that the basis for our rates moving forward will be this exorbitant sale price.

As customers who are already paying three to four times what households in surrounding states are paying, we feel we have no choice but to protest this proposed action. Mr. Snyder, [who owns and operates Jefferson Utilities], should be permitted to sell his water system if he so desires. This sale should be achieved with the best interests of the customers of Jefferson Utilities Inc. and the citizens of Jefferson County considered first. Not the shareholders of a multi-billion-dollar corporation that had revenue of $3.93 billion and income of $1.26 billion in 2021.

Based upon all the foregoing, on behalf of all the residents of Deerfield Village, I emphatically request that this sale be stopped. Please protect us from unfair and unreasonable increases to our water bill.

‘A public company must generate shareholder value’

From JUSTIN DUEWEL ZAHNISER, Shepherdstown resident

The ultimate question for residents of Jefferson County is whether they believe, in the long run, that a publicly traded company, beholden to shareholder value, will provide the most cost-effective (note: not cheaper) service for all residents, equally.

In the short term, American Water will make investments in infrastructure and will raise rates accordingly. If service remains with public works, you should expect taxation over time to raise the funds to improve the same infrastructure (or quality to suffer). This is probably an even trade.

In the longer term, American Water will move to increase shareholder value and to pay off its significant debt. This is not a moral judgment on American Water; it is how public companies are structured and their leadership are incentivized. If they cannot profit in a location, they will cut costs (read: quality) or raise prices. 

A public works commission can “go even” by its nature; a public company must generate shareholder value. This incentive structure is effective for shareholders, but it has mixed results for employees and customers.

Has American Water made available to the public any case studies that show the long-term benefits to residents of their takeover of other public utilities? Has the state adequately vetted publicly available information about American Water’s long-term performance in other states? Has the state consulted with their peers in other states regarding their experience with an American Water takeover? If so, where is this information publicly available? What assurances do residents of the county have that American Water will provide adequate service at a loss if their plans have to more become fluid (pardon the dad joke)?

If this plan goes forward, which it probably will, I encourage anyone in Jefferson County with the means to acquire a share in American Water, so that you receive “insider” signals as to what their plans are for Jefferson County, which communicate in terms of shareholder value and profit maximalization, rather than public relations.

‘Having quality water can now actually be taken for granted’

From SUSANNE AND JIM KOENIG, Harpers Ferry residents

Any community with an aging or inadequate water service infrastructure knows the prohibitive cost and nearly hopeless frustration that impacts every single household in the community. Keyes Ferry Acres was once that decrepit water system, and current public service commissioners need only consult their archives for a bulging box of files documenting the lengthy ordeal. 

Reading letters of complaint collected over two decades will convey the dire situation of recurring unexpected water outages; erratic water pressure; an entire community system served by waterlines sized for single residential use, and those lines so clogged with residue to reduce the water flow opening to pinkie-size; as many as five or 10 C-clamps commonly found patching a 24-inch section of waterline; lines prone to freeze where buried only one or two feet below surface level; water from the faucet peppered with black manganese precipitate; whole laundry loads ruined by iron stains from residue stirred up by a pressure change in the line; and the ongoing inconvenience and expense of buying and hauling gallons of potable water for the home. 

That was prior to JUI.

Twenty-two years later, gradually over time the groundwater wells have become interconnected; a generator kicks in to maintain water flow in the event of a power outage; a network of six-inch mains has been expanded and elsewhere new connector lines are upgraded. Water meters are in place; fire hydrants are installed. Water is treated and routinely tested for quality. Water flowing from the faucet is clear, clean, potable. A mortgage loan is no longer held up based on lack of a reliable water system. All this is the result of Jefferson Utilities’ acquisition of the system in 2001. 

Having quality water can now actually be taken for granted. But it has been nothing less than an astounding improvement to the quality of life for Campsites, West Ridge Hills and Keyes Ferry Acres. Except for Jefferson Utilities, no entity was willing or interested in these water systems, and now they comprise a consolidated Mountain Water System which is an asset to the company, to the county and to every single community household served.

The achievement has been immense, and yet throughout the two-decade duration, completed at the remarkably modest cost of $45.12 per month. 

If American Water is the Jefferson Utilities successor it will have a high standard to meet since, unreservedly, I give Jefferson Utilities a highest commendation.

‘I’ll switch to rainwater if necessary’

From JOHN DZUGAN, Shepherdstown resident

Jefferson County should not sell off the water utility. A 50 percent rate hike is too much of a burden for the residents to handle all at once and should be spread out over five years, at least. I’ve been a homeowner for over 30 years, and I’ve never in my life experienced an increase of that magnitude with any utility company. 

I currently own a second property in Anne Arundel County Maryland, with seven people living there, and my water and sewer combined is paid every three months and it’s still less than what we pay monthly here in West Virginia with only two people living here. I believe the county is creating a tax hike upon the citizens and hiding it by reducing its burden. This is totally unfair for the current residents and future residents of Jefferson County. 

The water here is of very poor quality. It’s fouling up our faucets, dishwasher, toilet, tile and glass shower walls. Currently, we go to Berkeley Springs, West Virginia, for our drinking water. This is too heavy a burden on the elderly and those with limited incomes. I’ll switch to rainwater if necessary. 

This sale is not good for the current and future residents of Jefferson County, West Virginia, and must not be allowed to take place.

‘Our system needs more work’

From MARGARET WOEKLERS, Kearneysville resident

Many people are concerned with the low income families coping with higher costs, never mentioned that WV American Water Company has programs that would help. Some of these programs are a monthly discount for people who qualify and grants to help with overdue water bills, and more. This is due to WV American Water having a large customer base. This assistance is beyond Jefferson Utilities Inc.’s capability.

The water system in the community in which we live, was acquired by Jefferson Utilities in 2020, the wells failed and Jefferson Utilities had to take over early. Therefore, we now bear the pain of a water system being turned off frequently, and quality issues. With Jefferson Utilities we know the pleasure of better water quality, less shutoffs and notifications of shutoffs for repair. 

Even with the improvements that Jefferson Utilities has done so far, our system needs more work. A larger company with more resources might be able to update our water system more rapidly, considering the improvements accomplished by Jefferson Utilities. They do the best they can with the resources they have. 

I’m not thrilled with paying more, but if WV American Water is able to perform faster improvement in the water system it would be worth it. I am in favor of WV American Water acquiring Jefferson Utilities, etc.

‘Monopolies do not have to worry about customer satisfaction’

From JOHN PHILIP and PATTY BAIN BACHNER, Shepherdstown residents

The provision of clean water and effective sewer service is inherently a government function. To grant ownership of our existing service to a private entity is to give that private entity a monopoly. No matter what that monopoly may choose to charge, we have only two choices: pay or, alternatively, go without water/sewer service.

Unlike our local government, a private entity would do its best to enhance profitability by doing as little as it possiblycan to meet whatever requirements are imposed as the private entity interprets such requirements. If we, the users/payers, believe that ownership is interpreting requirements incorrectly, our alternative would be a costly, time-consuming, [time]-wasting lawsuit.

Throughout the United States, where such sales have gone into effect, the results have made headlines, and not good ones. Yet, in every case of which I am aware, the resolution is not a good one, because private-sector, utility-owning entities put profit above customer satisfaction, because monopolies do not have to worry about customer satisfaction.