Enacted in 2016, Act 12 is a law in Pennsylvania that changed how municipal water and sewer systems are valued when sold to private investor-owned (for-profit) companies. It allows these systems to be sold at an artificially inflated price (higher sale price) which consequently leads to higher rates for consumers. Private companies pass on these costs to cover their investment and generate profits.

The law was intended to encourage the sale of municipal utilities to private companies, primarily small, troubled systems, by making it financially attractive. However, since the enactment of Act 12, it has led to significant rate increases, acquisitions of well-run, viable water and wastewater systems, and reduced local control over water and wastewater assets and services.

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What is Act 12 – Valuation of Acquired Municipal Water/Wastewater Systems

Act 12 of 2016