Op-Ed: "Private Ownership of Public Utilities" in Kentucky

Opinion Editorial by Larry Averitt, Administrator, Bluegrass Water Resistance

I read with great interest the April 30, 2023 news article in ClayCoNews entitled, "Attorney General Cameron's Office of Rate Intervention Saves Kentuckians Nearly Half a Million Dollars in Proposed Water Utility Rate Increases." The story notes that the AG's Office of Rate Intervention (ORI) saved taxpayers $432,122.00 in utility rate increases.

While all Kentucky tax payers should certainly appreciate the efforts of the ORI in such matters, I would like to bring to the attention of your readers the fact that there is a much bigger, and very relevant story that needs to be told.There is a new corporate trend, in which greedy for-profit corporations are seeking to control our most basic life-sustaining needs: food, water, shelter, and life sustaining utility services.Large hedge funds have been purchasing real estate en masse, which has driven up the cost of housing to extraordinary levels, forcing many people to for-go home ownership.For decades now, huge conglomerates such as Monsanto, Bayer, and others have sought to gain control of much of our food supply by producing genetically modified seeds and agriculture products to distribute worldwide.Now, these private corporate interests seek to continue that practice by acquiring ownership of our water and waste-water services, then--as the evidence clearly demonstrates--hold us "hostage" in a veritable "local monopoly," and demand outrageous monthly service rates for the basic human necessities they now fully control.Such is the case with Central States Water Resources, Inc. (CSWR, LLC), a wholly owned subsidiary of US Water Systems, LLC , and one of the largest investor-owned utilities in the United States, founded in 2014.CSWR, LLC (formerly, First Round) and Central States Water Resources, Inc. (CSWR) are affiliates of each other and sit atop the corporate structure (CSWR Group).The stated goal of CSWR Group is "to acquire and recapitalize failing systems as investor owned regulated water and wastewater utility companies." To date, CSWR Group has acquired small water and wastewater systems in Missouri, Arkansas, Tennessee, Kentucky, Louisiana, Texas, North Carolina, Mississippi, Arizona, and Florida. Unfortunately, that recapitalization comes at a great cost to their new unwitting customers.US Water Systems, LLC / CSWR, LLC operates via subsidiaries in each state. In Kentucky, the CSWR, LLC subsidiary is Bluegrass Water Utility Operating Company, LLC (Bluegrass Water).In 2019, Bluegrass Water began acquiring distressed water and waste-water systems throughout Kentucky.On October 1, 2020, Bluegrass Water filed an application with the KPSC for approval of construction and an adjustment of rates pursuant to 807 KAR 5:001, Section 16. Their proposal was for a flat-rate monthly service fee for all systems. At that time, each individual system had it's own separate rate, based on operational costs. As a result, Bluegrass Water's proposed increase and implementation of a "flat-rate" for all residential systems ranged from 65.3% for the City of River Bluff and environs to 669.1% for the Delaplain area in Scott County.On October 15, 2020, I created "Bluegrass Water Resistance," a Facebook group, which currently exceeds 230 members, dedicated to lobbying the Kentucky Public Service Commission (KPSC) to deny Bluegrass Water's rate increase application. We believed Bluegrass Water, LLC was attempting to take advantage of a captive market and implement unjustified and unreasonable public utility rate increases. We filed numerous complaints, accordingly, with the KPSC, as well as several other government agencies and political offices.However, on August 2, 2021 the KPSC issued a "Final Order" approving most of Bluegrass Water's demands, including flat rate billing, resulting in an outrageous rate increase up to 587.8%!Although the majority approved and submitted the "Final Order," then Vice Chairman, Kent Chandler dissented in part, raising several issues, including, in his opinion, that Bluegrass Water had failed to meet it's burden of proof to justify the rate increases requested, and that the increases granted by the Commission were not "fair, just or reasonable."Henceforth, we believe that, with the exception of Vice Chairman, Chandler, the KPSC clearly abandoned it's sworn mission and statutory requirement to approve only "fair, just and reasonable rates" in this case, in accordance with KRS 278.270, and KRS 278.030(1). Meanwhile, Bluegrass Water continues to expand their reach, by acquiring more water and wastewater systems, and on February 27, 2023, filed an application with the KPSC for yet another unjust rate increase for an additional 15.6% for all wastewater customers! This application for further rate increases is currently pending with the KPSC as case #2022-00432.Having been subjected to these unreasonable and unjust rate increases granted to Bluegrass Water by the KPSC, and filing multiple complaints with the appropriate state agencies to no avail, we the unwilling customers of Bluegrass Water are seeking public support to overturn what is clearly an unjust action, and a violation of both Federal and State consumer protection laws.The blatant abuse of monthly rates for vital, life sustaining services through the private acquisition of public utilities continues to spread across the country. This gross injustice and violation of consumer protection laws must be stopped, and the state PSC's must be held accountable for their failure to do so!Sincerely,Larry Averitt, AdministratorBluegrass Water Resistance


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