Already the region’s largest gas utility, Peoples Natural Gas could emerge as a top water supplier, too, under an idea percolating through Pittsburgh City Council.
The North Shore-based company is looking to build an advanced treatment plant on the Allegheny River, from which it could pipe drinking water to neighborhoods served by the Pittsburgh Water and Sewer Authority, Mayor Bill Peduto said Wednesday.
If Peoples can’t partner with PWSA, it could develop a parallel network of distribution pipes and offer city water customers a choice: PWSA or the private utility, Mr. Peduto said. Should that scenario become a real possibility, he wants to make sure the city and Peoples “work together instead of working apart,” he said.
PWSA is already upgrading the municipal water system, including an aged treatment plant on the Allegheny near Aspinwall, after decades of lackluster upkeep.
“There’s no doubt that if PWSA loses customers, the opportunity to create a new water system [as PWSA] will be jeopardized — because you just won’t have the base of revenue to be able to borrow the money that you would need,” Mr. Peduto told the Pittsburgh Post-Gazette. He maintains the city system should stay publicly owned, even if the city eventually asks the private sector to help overhaul and run it.
At Peoples, spokesman Barry Kukovich confirmed “a new treatment plant is part of the general conversations” as a prospect. He said the company, owned by SteelRiver Infrastructure Partners in Sausalito, Calif., has been “throwing out concepts” about how it might work with PWSA. He wouldn’t say where a new plant might be located.
Peoples is among nearly 20 companies that approached the Peduto administration or council members with interest in fixing up the city-owned water system. But Peoples has drawn particular attention after it quietly pursued a pitch last year worth more than $1 billion to help restore and manage PWSA.
Mr. Peduto’s former chief of staff, Kevin Acklin, who fielded inquiries from Peoples on behalf of the administration, joined the company early this year as vice president and chief legal officer. More recently, Peoples executives visited with council members to explore prospects for PWSA.
Whispers about a new treatment plant intensified after several members confirmed speaking with Peoples at the company’s request. As recently as this month, Peoples lobbied to replace the city’s deteriorating water lines and to assume a leadership role at PWSA, according to sources familiar with the council discussions.
“I think anything is possible at this point. I really do think anything is possible,” Mr. Kukovich said, limiting his remarks.
He said the company is “listening to city officials about their needs and ideas regarding PWSA and trying to determine if we can become part of the solution.”
Pressed about a motive, Mr. Kukovich said Peoples knows “the healthier we are as a community, the healthier we are as a company.”
“We are embedded in this community,” he said. “So however we can make it healthy, we will.”
Further, the company expects to see savings in joint infrastructure work — that is, restoring both gas and water lines when crews dig up the ground. “We’re in the same trenches along with city employees,” Mr. Kukovich said.
Council members described their meetings as noncommittal, saying they’re open to different ideas for strengthening and organizing PWSA. Most immediately, they’re working through proposals to restructure PWSA board governance and prevent future failures. A variety of lead contamination, billing problems and water-main breaks has heightened scrutiny at the authority.
“If there’s ever a way to better service for our constituents and ensure better quality of water, better delivery and better cost, I’m open to the conversation,” Councilman R. Daniel Lavelle said. Peoples has not sought to meet with him, he said.
He and other council members are angling to safeguard public ownership of the water system. PWSA, which leases the infrastructure from the city government, has aired confidence that it can meet both customer expectations and regulatory standards.
“It seems as though the strategy of Peoples Gas is to fake it until you make it — just start saying we’re going to do all this, anyway, so the city may as well negotiate,” said Aly Shaw, organizer at the Our Water Campaign. She dubbed that a “false choice.”
The coalition has urged public control at PWSA. Supporters argue that private companies would siphon profits and keep the city from enjoying “the investment we’re making in our water system right now,” as Ms. Shaw said.
Still, Mr. Peduto said a private-sector partnership could be promising. He has asked PWSA to craft, by summer’s end, a 12-year plan for “a 21st-century water system that will provide the highest-quality water for the next 50 years.”
When that plan is complete, the city and PWSA could solicit private-sector proposals for how best to achieve it, Mr. Peduto said. The process would need to be open and transparent, he said. Board governance changes would need to take effect first, too.
“We have to have an understanding of what it would cost to do [the improvements] ourselves before we can have serious discussion on what others could be able to provide,” Mr. Peduto said. “We also have to be open to the idea that maybe somebody can do it better.”
Adam Smeltz: 412-263-2625, asmeltz@post-gazette.com, @asmeltz.
First Published: May 30, 2018, 11:36 p.m.
Updated: May 30, 2018, 11:44 p.m.
