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April 24, 2020

Chester Water Authority Achieves Victory in Fighting Off Hostile Takeover

On April 24, 2020, the Chester Water Authority secured a significant victory in its long-running efforts to fight off a hostile takeover from the City of Chester. The Authority is a regional entity that supplies water to 200,000 people and businesses across over 30 townships in Southeastern Pennsylvania. A small part of that service area, about 21% of customers, are located within the City of Chester. The Authority is well-run, its rates are among the lowest in the area, and its it a perennial winner of water quality awards. The City of Chester, by contrast, has been in severe financial distress for decades.  Desperate for cash, in 2019 the City attempted to unilaterally seize the Authority and sell it off, likely to a larger for-profit corporate utility. The City’s attempted sale would cause water rates to permanently double, or more. The increases would be so significant that wide swaths of the poorest residents in the service area, including thousands of families in the City itself, would fall below the “water affordability” guidelines from the EPA.  And since the Authority was already providing high-quality water and service, customers would receive no commensurate benefit to go with their much higher bills.


This resulted in a series of related litigations in the Delaware County Court of Common Pleas.  The Authority has argued that it is ludicrous for the City, which represents such a small part of the service area, to assert a unilateral right to seize and sell the entire regional system. The Court agreed. On April 24, Judge Spiros Angelos ruled that since the Authority is a regional entity, the City of Chester has no unilateral right to force a hostile takeover. Other aspects of the broader litigation will continue, but this was an important victory in the Chester Water Authority’s fight for its very existence.

Read the Court's decisions here and here.


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