Dec 16, 2023 By Mike Jones 4 min read

State environmental regulators and the East Dunkard Water Authority are heading to mediation over the proposed receivership that would allow Pennsylvania American Water to take immediate control of the troubled water provider in southeastern Greene County.

A hearing on the receivership was scheduled for this Tuesday before the state Commonwealth Court in Harrisburg, but EDWA officials asked the court for a delay, which was granted last week in order for the two sides to hold closed-door negotiations with an independent mediator.

The water authority and Department of Environmental Protection will meet Jan. 4 in Harrisburg for what EDWA solicitor Lane Turturice said will be “to iron out a fair and equitable terms of a receivership” and ensure that ratepayers are protected when the process is finalized. He added that the authority has endorsed the receivership with PAWC and asked for mediation to work through any differences.

“I’m hoping mediation will work,” Turturice said. “It should not fail. The issues are very narrow and should be able to be worked out.”

The DEP filed paperwork in late October asking the appellate court to sign all operations of EDWA over to PAWC through a receivership after a malfunction at the water authority’s treatment plant near Dilliner left 4,200 people in its network without water for several days. PAWC was selected for the receivership because it had agreed over the summer to purchase EDWA for $5 million, although it’s not known when the acquisition will be finalized.

The steps to approve the receivership are somewhat arduous since the state Public Utility Commission had to also file an emergency order that would allow PAWC to take over operations should Commonwealth Court ultimately grant the receivership. In addition to the receivership, the DEP is pursuing other petitions asking the court to enforce other orders levied against the water authority that it allegedly failed to follow.

Turturice said the EDWA wants protections in place before PAWC takes control to make sure that customers are not charged for any infrastructure upgrades made before the sale is finalized. He said there are concerns over whether any rate increases would fall under the PUC’s oversight with a receivership since EDWA is not under the utility commission’s regulation.

Turturice pointed to promises by PAWC to make $17 million in various upgrades once the sale is completed, which he did not think should be passed directly onto customers through rate increases.

“What we want to make sure of is that PAWC does not try to gain an unfair advantage where they’re able to charge customers for upgrades through the receivership for things they were going to do anyway,” Turturice said.

He did not have a timeline for when the receivership would move forward if mediation is successful. If the negotiations fall apart, the court directed the DEP to request a new hearing date, which would be expedited to make a final ruling, according to the court docket.

PAWC spokesman Gary Lobaugh said the water company is prepared to move forward with the receivership regardless of whether it’s through mediation or a court order.

“Pennsylvania American Water hopes that the mediation process will lead to the company being authorized to assume control of the East Dunkard Water Authority system as the receiver and will work to provide the residents of these communities with safe, reliable drinking water and service,” Lobaugh said. “The company stands ready to be a solution for this troubled system and has the resources, leadership, and expertise to bring distressed systems into compliance.”

A spokesperson for the DEP could not be reached for comment Friday.

While the treatment facility has been running since the four-day outage in late October, other issues continue to persist with the water authority.

On Thursday night, EDWA notified customers in Bobtown of a water outage due to a pipeline break that was more “complex” to fix than originally suspected. Water service was restored shortly before noon Friday, although the problem forced Southeastern Greene School District to hold a “flexible instruction day” due to the water outage that affected Bobtown Elementary School. A boil water advisory remained in effect for Bobtown residents as of Friday night.