On any given day, this Pa. community might not have running water. Residents are at a loss.

FERGUSON TOWNSHIP — Linnet Brooks wasn’t surprised when she went to brush her teeth one night in early March and the faucet ran dry.

She texted her neighbors in a group chat to discuss these kinds of outages and left messages on the emergency and general lines for Rock Spring Water Company, which is privately owned and serves about 500 properties in rural Centre County.

About an hour later, Brooks’ water came back on with no explanation for the interruption.

Had the issue lasted longer, she would have relied on the gallons of bottled water she keeps in the pantry. Other Ferguson Township residents in the western part of the municipality have adopted similar solutions.

“It feels a little bit like living in a developing country,” Brooks told Spotlight PA.

A four-month Spotlight PA investigation found customers served by Rock Spring’s roughly 20-mile system have been failed by the company, state regulators, and elected officials. Efforts to find new ownership have gone nowhere, while years of neglect have led to crumbling infrastructure, low water pressure, regular outages, and sometimes lengthy boil water advisories.

Interviews with a dozen people — including customers, elected leaders, and former township staff — reveal deep frustrations with the water company, but also a sense of resignation. That’s because customers fear a takeover of the shaky system would lead to significantly higher bills.

Such anxiety is not unfounded. A 2016 Pennsylvania law empowered private utility companies to pass acquisition costs to customers, resulting in major rate increases across the state.

“The sentiment was that everybody would like it to be better,” Peter Buck, a former township supervisor, said of customers and ongoing issues with Rock Spring. “But did they want to pay a whole bunch more for more reliable water?”

Little revenue, few repairs

Charles Campbell founded Rock Spring in 1947 and passed down the water system to his children. The company’s most recent annual report lists one of them — J. Roy — as the current president, along with 11 other shareholders, several of them members of the Campbell family.

The water was initially sourced from nearby streams to serve a group of local farmers. Those landowners eventually subdivided their properties, which now consist of neighborhoods.

This extension has resulted in leaks, outages, low pressure, and boil water advisories. State policy considers any water loss above 20% excessive, and Rock Spring has consistently lost levels in excess of this standard for more than a decade.

Customers have reported billing issues to the Pennsylvania Public Utility Commission, and regulators with the Department of Environmental Protection have levied dozens of violations against the company for failing to monitor and promptly report contaminants. Records show the company corrects most violations, only to reoffend.

The current system, estimated to be at least 50 years old, needs $13.5 million in repairs, according to a 2022 engineering report commissioned by the township. Rock Spring did not answer questions about its efforts to upgrade the system, but records show it doesn’t have the money to cover extensive repairs or replacement. The company averaged $136,600 in revenue between 2018 and 2022. Meanwhile, legal costs totaled about $70,900 over the same period.

The company, however, has resisted efforts to sell the system — a decision it refused to explain in response to questions from Spotlight PA.

Despite these issues, customers think J. Roy Campbell means well. David Pribulka, who worked for Ferguson Township from 2012 to 2022 and was a Rock Spring customer until he moved out of the county, described the owners as “salt-of-the-earth people” rather than absentee landlords.

Pribulka told Spotlight PA that managing the business has overwhelmed the family, but Campbell has refused to give up.

That’s his right: Because Rock Spring is a private company, county and township officials cannot force its owners to sell. State law would allow the Public Utility Commission to mandate a sale, but the agency rarely uses that power.

The commission and Pennsylvania’s Office of Consumer Advocate entered into a settlement with Rock Spring when the company last increased its water rates in 2013. Rock Spring’s owners promised to reduce water loss and make efforts to sell the company as part of the agreement, but the latter did not come with a mandate.

Rock Spring should have reduced losses to at least 23.2% based on metrics outlined in the agreement. But between 2011 and 2022, the company averaged 63% water loss, according to a Spotlight PA review of annual reports filed with the PUC.

Despite Rock Spring’s failure to comply with the settlement, PUC spokesperson Nils Hagen-Frederiksen said the commission does not yet see a reason to step in.

“This action is reserved for emergencies where a small water or wastewater utility is in violation of statutory or regulatory standards related to acute health and safety standards, cannot provide adequate service, or is at risk of catastrophic failure,” he said.

The DEP, which monitors drinking water safety, took action against the company in 2006, resulting in a consent decree that required Rock Spring to submit a corrective action plan detailing how it would detect leaks and reduce water loss to at least 30% by the end of September 2010.

If the plan failed, the company committed to replacing its main waterline no later than August 2011. Rock Spring never completed this work, resulting in a yearslong tug-of-war with the DEP. In January, Commonwealth Court ordered Rock Spring to complete the project by the end of 2024, reduce its annual water loss to at least 30%, and pay a $40,000 penalty.

Hagen-Frederiksen told Spotlight PA that the commission is “actively monitoring” the DEP’s legal case and plans to continue watching developments with the company.

Rock Spring declined interview requests for this story, and did not answer questions about a possible sale of the company and if it’s taking steps to comply with agreements with state agencies.

In an email, a representative who didn’t provide their name or title told Spotlight PA that several outside companies have helped with leak detection.

In addition, the representative said that customers are responsible for finding leaks on their properties and scheduling a time with the company to upgrade their meters. The company said those efforts would help address the systemic water loss that has plagued Rock Spring, but added that most customers haven’t cooperated.

Georgianna Sutherland / For Spotlight PA

Discouraged from speaking out

The PUC’s online database shows seven complaints about Rock Spring since 2008, including five filings from customers primarily over service and billing disputes.

Brooks submitted a formal complaint about Rock Spring to the PUC in 2018, but the commission sent it back, erroneously saying it “does not regulate this privately held company.”

In an email, Hagen-Frederiksen said the response was “issued by mistake and did not conform to our internal processes and best practices.” It appeared to be a “singular error and not representative of a systemic issue,” Hagen-Frederiksen wrote.

“To be clear, the PUC is committed to handling all consumer complaints with the utmost care and urgency,” he said. “If customers are continuing to have issues with Rock Spring Water Company, we encourage them to bring that to the attention of the PUC.”

Customers interviewed by Spotlight PA had various reasons for refraining from filing complaints. Some don’t want to cause trouble for Campbell or see their rates go up.

Someone newer to the community was discouraged by the lack of action following a 2014 public meeting, which Ferguson Township officials helped facilitate with the Rock Spring owners and state officials. More than 100 customers attended, according to a meeting memo.

The conversation ended with Ferguson Township offering to assemble a voluntary committee to explore funding options for improvements, calculate the costs of repairs, and research new owners.

A decade later, customers have turned to a private Facebook group to vent their frustrations. Complaining on social media, however, is unlikely to accomplish anything, Pribulka said.

“It takes a sustained, grassroots effort to make lasting change,” he said.

Andrew Place, a PUC commissioner from 2015 to 2020, said one complaint filed to the agency should have triggered state-level action. Continued water loss also implies the need for a “global solution,” not a one-off fix to a single complaint, he told Spotlight PA.

“It should not need class action or dozens of complaints,” he said.

A buyer for Rock Spring

Rock Spring has remained under the same family’s ownership since 1947, but the company has entertained the idea of selling over the years.

Its owners approached the State College Borough Water Authority in April 2008 about buying the company, but Rock Spring rescinded the offer two months later, per public records.

The water authority commissioned a feasibility study, obtained by Spotlight PA, to evaluate Rock Spring’s infrastructure and calculate the cost of necessary repairs.

Altoona-based firm Gwin Dobson & Foreman Engineers compiled the study using data from the water authority, annual reports filed with the commission, and a field survey. The firm determined that “large parts” of the system would need to be replaced soon, noting that most lines were unlooped — which can hinder efficiency and flow — and had dead ends.

The report also noted a detailed map of the system couldn’t be located.

The engineers found that most residential customers had meters to track their water use but said farmers’ properties appeared unmetered “by agreement” with Rock Spring, so their bills don’t reflect consumption.

The water authority has acquired local systems in the past, including in Harris Township and Pine Grove Mills, but it cannot force Rock Spring to sell. The report described the municipal agency as “the only logical entity capable” of taking over Rock Spring, and noted that a previous assessment by the water authority “forecasted this possible system takeover.” The water authority also has existing infrastructure that would ease an acquisition.

Brian Heiser, the water authority’s executive director, declined to comment.

In recent years, efforts to resolve issues with the company and find a buyer were driven by Laura Dininni, a Rock Spring customer who served on Ferguson Township’s five-member Board of Supervisors.

Emails obtained through public records requests show repeated messages from Dininni to township staff and the water authority about abrupt service outages, as well as requests to talk about ways to solve problems. She also sought help from county officials to explore funding infrastructure repairs.

“When you buy a house here, there is no way of knowing how terrible the situation is,” Dininni wrote in an October 2022 email to township staff. “Water is everything.”

Ferguson Township used the same engineering firm, Gwin Dobson & Foreman Engineers, to assess Rock Spring’s system in August 2019 and again in January 2022, costing $16,100. The 2022 study was “closely coordinated” with the water authority, according to the report.

That report estimated $13.5 million in needed upgrades and repairs, including installing a new water main and system interconnections, and replacing asbestos cement pipes.

The report argued acquisition by a public system is the “only viable option” for future operation of Rock Spring, estimating it could be sold for $100,000-$150,000. Without expeditious improvements and funding to support construction on the water system, engineers anticipate that “chronic operational problems will only become more severe.”

“Regardless of ownership, the proposed system improvements are required for a system that has clearly reached the end of its useful life,” the engineering firm wrote in its 2022 study.

Since that 2014 public meeting, nothing has changed for customers, and the company continues to report significant water loss. Dininni resigned from elected office in July 2023. Her departure, and Pribulka’s exit in March 2022, have left Rock Spring customers without a direct advocate on the board or in the township’s leadership.

Township Supervisor Matthew Heller, who filled the vacancy when Dininni stepped down and later was elected to a four-year term, represents Rock Spring customers. But he lives in Pine Grove Mills, which is outside the company’s coverage area.

After months of unanswered interview requests, Heller told Spotlight PA in February that he was interested in talking but never agreed to a meeting. In April, he told Spotlight PA to talk to Board Chair Lisa Strickland, citing procedure. Strickland did not respond to messages seeking comment.

Talks between Ferguson Township staff and the State College Borough Water Authority about finding a solution to ongoing issues with Rock Spring have continued in private.

In January, Centrice Martin, the current township manager, requested an update via email from Heiser on the company. He indicated recent, though not necessarily productive, conversations with Campbell and attorneys.

“I wish I had a better report to provide,” Heiser wrote.

Concerns over higher bills

Grant funding and loans could help a future owner, specifically the water authority, avoid placing undue financial pressure on existing customers; however, they’ll likely bear some of the costs of improvements.

Rock Spring customers told Spotlight PA they were conflicted over whether it was worth paying more for reliable water. Ultimately, it comes down to how much rates would go up, they said.

The average residential Rock Spring customer pays $19.35 monthly based on water usage of 3,379 gallons. For comparison, the State College Borough Water Authority charges $29.27 each month for similar use, per the 2022 Gwin Dobson & Foreman Engineers report. A board of directors sets rates for the water authority.

If another private company bought Rock Spring, customers could face steep increases. The engineering firm noted in its report that the family-owned business previously met with a larger utility company to discuss a sale. That would have resulted in $50 to $100 monthly bill increases.

Customers in areas across the state have experienced higher bills due to legislation passed by the then-Republican-controlled legislature and signed by former Democratic Gov. Tom Wolf in 2016. The law, known as Act 12, let investor-owned utilities bake the costs of buying a municipal system into PUC rate increase requests for all customers, and created new rules for pricing water systems.

Lawmakers hoped the law would help distressed municipal systems and improve water service.

Since Act 12 took effect, the commission has allowed private water companies to buy at least 21 local water and sewer systems, according to state officials. These acquisitions have resulted in rate increases ranging from 44.9% to 116.6%, PUC Chair Stephen DeFrank told lawmakers in testimony last year.

Patrick Cicero, Pennsylvania’s consumer advocate, has urged lawmakers to repeal Act 12 or at least add limitations to it, arguing the law has caused significant financial harm to customers with little public benefit.

A group of state House lawmakers has introduced a package of bills that would cap the acquisition amount at 125% of the depreciated original cost and spread out any costs incurred by customers over time rather than all at once.

Act 12 would not apply if Rock Spring were sold to the State College Borough Water Authority or a private company because it is not a municipal system. Instead, increased bills would likely be attributed to capital costs to improve the system.

Republican state Rep. Kerry Benninghoff has represented parts of Centre County for 27 years, but told Spotlight PA he wasn’t familiar with Rock Spring. However, he cited a similar situation from the 1990s, when the College Township Water Authority acquired the now-liquidated Lemont Water Company after a local push from residents to take over.

“These family-run operations are done on a short string. In return, they keep the costs down for customers,” Benninghoff said.

When a larger water company or municipal authority takes over operations, customers should expect to pay more, he added, to fund infrastructure upgrades and maintenance, plus staffing to provide service and address any issues. It’s the “proverbial wrestling match,” he said.

“People want better quality, better service, but that generally means it’s going to take more money to get that,” Benninghoff said. “It doesn’t matter what the utility is.”

Correction: This story has been updated to reflect Act 12’s impact on a potential acquisition of Rock Spring Water Company.

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