CWA sent notice to customers of a REQUIRED 14% rate increase. Here’s why.

• In August of 2024, the Receiver filed a “Plan of Adjustment” with the Federal Bankruptcy Court stating that it would dissolve the CWA, remove it’s board and monetize its assets.
• In September of 2024, Moody’s, a national credit rating agency, sent CWA a letter stating that they were reviewing their Aa2 credit worthiness rating (the highest attainable). In the letter they state:

“The review for possible downgrade of the Aa2 rating on the Chester Water Authority, PA’s Water Revenue Bonds reflects the uncertainty surrounding the fate of the bonds in light of their inclusion in the Chapter 9 bankruptcy Plan of Adjustment for the City of Chester. The plan contemplates the dissolution of the authority and the transfer of its assets, with the possibility that the authority’s debt would be assumed by an acquirer. Previously, our analysis had incorporated the prospect that in the event of a transfer or change in ownership of the authority’s assets, CWA’s debt would be defeased per state law, rather than assumed.”

• In June 2025, Moody’s announced that they were downgrading CWA to Aa3 from Aa2.

“The rating also captures some of the risks and uncertainty surrounding the bankrupt City of Chester’s attempt to seize and monetize the authority’s assets. The Supreme Court of Pennsylvania is currently considering this case. Depending how this unfolds, it could have dramatic consequences for the authority’s rating. The longer this litigation drags on, the greater the risk CWA faces from potential market access limitations and other challenges relating to this controversy. The most drastic scenario would be one in which the City of Chester assumes the authority’s debt, even temporarily. In that event, the rating on the authority’s bonds could be downgraded many notches.”

• Because of this, when CWA went to refinance debt this fall, they ran into roadblocks of getting the same low interest load they had before. CWA had to secure financing through a specialty lender at a higher interest rate.
• To cover these higher borrowing costs, ongoing inflation, and more than $1.7 million in unpaid water bills from Crozer Hospital (now closed following bankruptcy) and the City of Chester, CWA will implement a 14% rate increase effective January 1, 2026 and sent a notice to customers to inform them.

• CWA passed several resolutions regarding this debt service and necessary steps taken to secure funding given the actions of DCED and the Receiver:
  • April 24, 2025 Resolution (passed at CWA’s  April public meeting) – includes 10 pages of background
  • September 18, 2025 Borrowing Resolution (passed at CWA’s September public meeting)
  • September 18, 2025 Rate Increase Resolution  (passed at CWA’s September public meeting)

Fun Fact for Ratepayers: Did you know that Aqua sends a representative to every CWA public meeting and has done so for years?

City of Chester Bankruptcy Case

Case #: 22-13032
Court: United States Bankruptcy Court – Eastern District of Pennsylvania
Debtor: City of Chester, Pennsylvania

We encourage ratepayers to visit the Donlin Recano website for real-time access to publicly available documents filed in the bankruptcy case.