Concern over water monopoly leaves officials with questions

Trumbull County continues to fight a proposed water-rate increase.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
WARREN -- Trumbull County commissioners are questioning the relationship between two water supply companies and the relationship's effect on water rates.
Masury Water Co., which sells bulk water to the county for resale, is seeking a 25-percent rate increase from the Public Utilities Commission of Ohio.
The county buys water from Masury Water for $2.42 per gallon and resells it to 3,200 residential, industrial and commercial customers.
Masury Water, a subsidiary of Consumers Pennsylvania Water Co., Shenango Valley Division, is seeking a rate increase. PUCO staff, Masury Water and the Ohio Consumers' Counsel, the state's consumer watchdog agency, have agreed to an increase of $3.15 per 1,000 gallons, said Thomas Holloway, county sanitary engineer.
Recommendation expected: The case is before a PUCO hearing officer, who will make a recommendation to the commission for a decision. The county is trying to influence that recommendation.
"It's unfair," said James G. Tsagaris, president of the board of county commissioners. "They [Masury Water] are doing what they want to do. I don't like anybody to have a monopoly."
That relationship is being questioned in a brief filed with the PUCO hearing officer by Atty. Richard L. Goodman of Niles, who represents the county in the rate increase issue.
Kenneth Baumann, vice president of production for Consumers Pennsylvania and division manager of its Shenango Valley Division, said Masury Water is willing to negotiate a long-term agreement with the county.
The county wants the PUCO to defer any rate increase until investigations are conducted of the Masury Water and Consumers Pennsylvania corporate relationship by both the PUCO and Pennsylvania Public Utilities Commission.
Also, the county wants the PUCO to reject the higher rate increase.
Lawyer's allegation: In his brief, Goodman alleges that Masury Water is a shell corporation, though the relationship between the two companies is legal. Masury Water has no treatment facilities, employees, vehicles, or offices in Ohio and buys water from Consumers Pennsylvania, Goodman added.
The cost of water sold by Consumers Pennsylvania is determined by the Pennsylvania utilities commission.
Goodman argues that because of the "unusual corporate relationship," Masury Water does not challenge rates charged it by its parent company that "directly impact Ohio customers."
The issue about the corporations is not new, Baumann said.
He said the issue has been before the PUCO a number of times and the commission has found nothing wrong with it.
He maintains Masury Water and Consumers Pennsylvania are separate companies and regulators in both states have to approve separate rate requests.
What's required: It would be less costly, Baumann said, if there were only one corporation, but two are required -- one in Ohio, the other in Pennsylvania -- because of the states' regulatory commissions' requirements that utility companies be incorporated in their individual states.
He pointed out Consumers Pennsylvania received a rate increase last April that has yet to be passed along to Masury Water customers.
Goodman said the disparity in rates that Masury Water charges the county and Consumers Pennsylvania charges the city of Hubbard should again alert the PUCO to the need to investigate the corporate relationship.
Hubbard pays $1.10 per 1,000 gallons, while the county pays $2.42 to what Goodman terms "virtually the same company."