FERGUSON TOWNSHIP \u2014 Despite an order to sell, Rock Spring Water Company is pitching customers a last-minute idea to keep the troubled system in local hands.<\/p>\n
In mailed letters, the privately owned company asked customers whether they would be interested in forming a cooperative to take over the system rather than transferring it to Pennsylvania American Water.<\/p>\n
Joe Baker, a Rock Spring customer, said he was \u201cflabbergasted\u201d by the letter. He wasn\u2019t opposed to the effort but remained skeptical of the company\u2019s tactics.<\/p>\n
\u201cI\u2019d be 100% for it, if it were a real thing,\u201d he told Spotlight PA. \u201cI just don\u2019t think it is.\u201d<\/p>\n
A Spotlight PA investigation<\/a> published in June 2024 found that customers served by Rock Spring were failed by the private utility, state regulators, and elected officials.<\/p>\n Since then, the community has watched a yearslong regulatory process unfold, marked by shifting positions from Rock Spring over whether it\u2019s willing to sell the system. The company even signaled a preference for a local takeover, only to later reject an offer from the State College Borough Water Authority.<\/p>\n \u201cThey\u2019ve been dragging their feet, doing dumb things, complaining the whole time,\u201d Baker said. \u201cThat\u2019s why I don\u2019t believe it.\u201d<\/p>\n Pennsylvania American has served as the system\u2019s emergency operator since March 2025, after the state Office of Consumer Advocate requested the takeover to prevent \u201cirreparable\u201d injury to Rock Spring\u2019s 1,000 customers.<\/p>\n Prior to the takeover, Rock Spring had racked up dozens of regulatory violations \u2014 including failing to protect its water source, shutting off service without proper notice, and leaving a leak unfixed for six months. It also owed tens of thousands of dollars in fines as part of a yearslong legal battle with the state Department of Environmental Protection over excessive water loss.<\/p>\n The company resisted state directives to make repairs and find a new owner. Additionally, Rock Spring hasn\u2019t increased rates since 2013, and outside estimates to update the system range from $13.5 million to $16 million.<\/p>\n Customers interviewed in 2024 for Spotlight PA\u2019s investigation showed how the company\u2019s service \u2014 and its failures \u2014 have divided those who rely on the system. While some were torn between wanting better management and worrying about what new ownership might mean for their bills, others stayed loyal to owner J. Roy Campbell, whose family founded the business in 1947.<\/p>\n As the result of a lengthy and rarely used regulatory process \u2014 also called a Section 529 proceeding \u2014 state regulators approved a forced acquisition in June and ordered Pennsylvania American to buy Rock Spring.<\/p>\n In a filing<\/a> submitted to the state Public Utility Commission earlier this month, a lawyer for Pennsylvania American said the parties are in \u201cactive negotiations\u201d on a purchase price and an asset purchase agreement but asked for a 90-day extension to those talks.<\/p>\n If approved, the companies would have until December to reach a deal.<\/p>\n The utility commission declined to comment on Rock Spring\u2019s proposed cooperative, saying it wouldn\u2019t be appropriate to \u201cspeculate about any possible future actions.\u201d<\/p>\n \u201cThe Rock Spring Water proceeding remains active before the Commission,\u201d Nils Hagen-Frederiksen, a spokesperson for the regulatory body, told Spotlight PA in an email.<\/p>\n The regulatory process requires that alternatives be considered before forcing a sale.<\/p>\n Over the course of this proceeding, Rock Spring argued<\/a> that regulators didn\u2019t do enough to explore other options, but the company didn\u2019t formally propose a cooperative until recently.<\/p>\n Rock Spring\u2019s attorney Rodney Beard didn\u2019t answer a list of questions about the proposed cooperative, including when the company first started pursuing the idea. He told Spotlight PA that the company \u201cintends to comply with the PUC\u2019s orders but wants to explore the possibility of a co-operative structure for the benefit of customers of the water system.\u201d<\/p>\n \u201cThe co-operative structure is one of the options specifically listed in the statute that should have been discussed before or during the Section 529 process, and may be beneficial for the customers of the water system,\u201d he said in an email. \u201cAlthough it may be late at this point, Rock Spring felt it would be a worthwhile endeavor to attempt to explore it and see if customers are interested.\u201d<\/p>\n While You\u2019re Here<\/p>\n Spotlight PA\u2019s nonprofit reporting is a free public service, but it depends on your support. Give now to ensure it can continue.<\/p>\n Gary Lobaugh, director of government and external affairs for Pennsylvania American, didn\u2019t address the proposed cooperative but told Spotlight PA in an email that the company \u201cremains committed to complying with the directives established by the Pennsylvania Public Utility Commission and will continue to negotiate in good faith\u201d with Rock Spring.<\/p>\n \u201cWe remain focused on working constructively through the regulatory process and pursuing a path forward that serves customers and meets the Commission\u2019s requirements,\u201d Lobaugh said.<\/p>\n Rock Spring acknowledged the utility commission\u2019s order in the letter, telling customers that if Pennsylvania American ultimately acquires the system, their water rates would fall under its current tariff rates. In July, the PUC approved<\/a> a rate increase that boosts Pennsylvania American\u2019s annual revenue by $74.9 million. The new charges<\/a> took effect in August.<\/p>\n Rock Spring instead urged customers to consider the cooperative as an alternative, proposing a $1,500 one-time membership fee in exchange for a vote on company operations. The company said the idea could keep the system connected to the customers it serves while keeping their rates \u201cmore reasonable.\u201d<\/p>\n \u201cAs a cooperative, the organization would be owned and guided by its members, ensuring that the people who support and benefit from our services have a direct voice in its future,\u201d the business wrote.<\/p>\n It\u2019s unclear how a new structure would impact Rock Spring\u2019s current shareholders, whether customer rates would increase, or if the company would have enough revenue to make repairs.<\/p>\n Under the proposed structure, all customers receiving water service from Rock Spring \u201cmust be members of the co-operative,\u201d the letter says. Rock Spring currently serves roughly 500 properties. Recipients were asked to provide their account name and number and indicate whether they were interested by circling \u201cyes\u201d or \u201cno.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"FERGUSON TOWNSHIP \u2014 Despite an order to sell, Rock Spring Water Company is pitching customers a last-minute idea…\n","protected":false},"author":2,"featured_media":288014,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[28,30,29],"class_list":["post-288013","post","type-post","status-publish","format-standard","has-post-thumbnail","category-pennsylvania","tag-pennsylvania","tag-pennsylvania-headlines","tag-pennsylvania-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/288013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=288013"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/288013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/288014"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=288013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=288013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=288013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}