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The Pennsylvania Public Utility Commission has entered a cooperative agreement with the state's Infrastructure Investment Authority to better coordinate efforts by both agencies to improve the viability of small water and wastewater systems across the state.

The commission said many small systems had not increased rates when needed and had become unprofitable. The systems had been unable to acquire financing to make improvements to maintain good service quality and to meet future regulatory challenges. It added that the requirements of the new drinking water quality standards developed under the Safe Drinking Water Act had added significantly to both capital costs and operating expenses.

The "Memorandum of Understanding" between the commission and PENNVEST includes a commitment to many initiatives, including: 1) development of joint policies to discourage the formation of new, potentially nonviable systems; 2) stimulating comprehensive planning at the local and regional level; 3) coordinating the restructuring of existing nonviable public utility systems; and 4) developing financial assistance measures and ratemaking policies to increase the likelihood that water systems maintain viability. Re Memorandum of Understanding between Pennsylvania Infrastructure Investment Authority and Pa. PUC, Docket No. M-0097025, April 29, 1997 (Pa.P.U.C.).

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