The Daily Item, Sunbury, PA

March 31, 2013

Utilities irked by water fee proposal

By John Finnerty
Daily Item Harrisburg Bureau

— HARRISBURG — Electric utilities, the biggest water users in the commonwealth, are bristling at the suggestion that they will be asked to pay a fee to the cash-strapped Pennsylvania Fish and Boat Commission.

Through a quirk of geography, electric companies in half of Pennsylvania already pay consumptive use fees to governmental agencies — the Susquehanna River Basin Commission and the Delaware River Basin Commission.

Those fees add up to about $500,000 a year for PPL, based in Allentown, a spokesman said. PPL provides power to about 1.4 million customers in eastern and central Pennsylvania and pays fees to both basin commissions.

Fish and Boat Commission Executive Director John Arway has proposed levying a fee on large water users as a means of closing a budget gap after the commission backed away from a plan to close two trout hatcheries in a bid to save $2 million.

Last year, the Susquehanna River Basin Commission collected $3.6 million in fees for consumptive water use — that is, the water was used in a way that prevented it from being immediately returned to the river basin. The money is used to build reservoirs and other infrastructure that can release water into the river basin system during dry periods, according to Susan Obleski, a spokeswoman for the Susquehanna River Basin Commission.

The Fish and Boat Commission has estimated that electric companies use more than 6 billion gallons of water a day to generate power. The public water supply uses about 1.4 billion gallons of water a day. Other industrial uses consume about 770,000 gallons a day.

The $3.6 million in fees does not include a number of special arrangements that have been made with power companies that have invested in reservoir systems or other ways to collect water rather than pay the basin commission to do it, Obleski said.

The Delaware River Basin Commission was created through a compact formed by Pennsylvania, New York, New Jersey, Delaware and the federal government. The Susquehanna River Basin Commission was created by Pennsylvania, New York, Maryland, Virginia and the federal government. No comparable commission exists in the western portion of the state.

But what that means is that if the Fish and Boat Commission was to begin billing companies for using large amounts of water, electric companies and other large users of water in one half of the state would be getting billed twice by two separate governmental agencies for the same thing, said Jacob Smeltz, president of the Electric Power Generators Association, the trade group representing power plants in Pennsylvania.

“We would view it as a tax, and we would be strongly opposed,” Smeltz said. “We are cognizant of the Fish and Boat Commission’s budget problems, but we are dealing with very, very difficult wholesale markets.”

The price of wholesale power decreased by 50 percent from 2008 to 2011, and then from 2011-12, the price dropped another 23 percent, Smeltz said.

“If we artificially increase the price through a tax, it will add to costs of manufacturing and industrial processes,” he said. “I don’t think it makes sense to increase the cost of a commodity that everyone depends on.”