Will Allentown Water Privatization Raise Water Rates for the Suburbs?

Remember this?

Upper Milford Central and Madison Park North, residential authority customers pay $2.17 per 1,000 gallons. Allentown’s rate is a flat $3.10 per 1,000 gallons.

Chris Casey makes a related point, that the people whose rates would go up most under Ed Pawlowski’s water and sewer privatization plan are going to be the people who are currently getting underpriced water, and that’s not Allentown:

But I will point out an inconvenient truth or two. One is that a private operator more than likely will raise rates to recoup their investment, indirectly causing issues for suburban water customers of the Lehigh County Authority. If you don’t believe that could happen READ THIS

And I just don’t mean homeowners, I mean industrial users as well [...]

And that is where the money will start talking. There are three Upper mac industrial tenants that I can name right off the bat that use Lehigh County Authority water at their facilities, Coca-Cola, Nestle Waters, and soon Ocean Spray.  How do you think rising water rates would push their bottom line?

As a land use policy this would of course be great, since underpriced water and sewer infrastructure are key subsidies for fiscally irresponsible sprawl development – a trend local governments would be wise to halt.

As a water infrastructure policy, I don’t favor the privatization plan. I would prefer to see Renew LV’s plan for a regional water authority implemented, which would save between $40-60 million each year before 2020. Could Allentown join the Lehigh County Authority after the water and sewer systems are privatized?

Comments

  1. John says:

    You do understand the concept of wholesale pricing, don’t you? To compare LCA’s wholesale rate vs. Allentown’s retail rate is assinine.

    That kind of analysis/conclusion would get you fired in the private sector.

  2. GDub says:

    When it comes to “privatization,” they are “privatizing” a revenue source that happens to be a water utility. If Allentown owned a chicken farm, an apple orchard, or a cigarette kiosk that produced that much revenue on top of expenses, they would “privatize” that too.

    Regardless, sounds like the privatization ship has sailed. How is a regional approach going to work after Allentown has hocked out its facility? Are you proposing that the company buy the region’s water systems too?

    • Jon Geeting says:

      I’m asking if Allentown can join the Lehigh County Authority, and if it will still be possible to consolidate political authority over all the different municipal water systems.

  3. GDub says:

    That is a good idea for water delivery. However, I doubt it will end up with an “up front cash payment of 150-200 million dollars” to the All American City.

    • Jon Geeting says:

      Right, so I think they should do what’s best for water delivery and figure out some other ways to pay for pensions.

      • GDub says:

        I don’t think there’s the slightest bit of evidence that anyone in the city government is interested in 1) finding “another way” to pay for pensions or 2) finding a better way to deliver water at lower cost.

        I would say there’s a high chance that this “infusion” of cash will be used to make the situation look as if it is solved, and in 6 years the situation will be the same, except that the city will be short a good revenue source.

        • Jon Geeting says:

          Anyone in city government? Really?

          • John says:

            Really. Pawlowski makes the decisions and his lackeys (both bureaucrats and council) implement those decisions.

            No one is interested in any other solutions because Pawlowski isn’t interested in any other solutions.

        • GDub says:

          My comment was that there was no evidence for either situation (at least in the press–I admit I don’t speak with local government folks). It would be great if it were not the case. What indications do you have?

          Every indication is that this is settled policy and that its cash first, water second.

  4. John says:

    The answer is no, none of the local municipalities will allow themselves to be consolidated under anything that Allentown is involved in.

    Allentown screwed them with the NIZ and is in the process of screwing them with wastewater treatment.

    Enough.

    • Jon Geeting says:

      So everybody else would quit if Allentown joined LCA? LOL

      • John says:

        If Allentown sold its assets to LCA in a commercially reasonable transaction, and Allentown then became another of the municipalities that LCA services, everyone is fine.

        If by ‘involved’ you mean Allentown has some sort of senior role, gets board seats, or is involved in running LCA, there would be a problem.

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