FERGUSON TOWNSHIP — Efforts to strip control of a troubled rural water company from its longtime family owner have hit another roadblock, again delaying a permanent fix to years of unreliable service.
Rock Spring Water Company recently rejected a $65,000 offer from nearby State College Borough Water Authority to buy the private Centre County system.
Rock Spring is currently being managed by Pennsylvania American Water Company, one of the state’s largest investor-owned utilities. State regulators in March ordered an emergency takeover of the system after a judge found that its 1,000 customers faced “imminent health threats.”
The five-member Pennsylvania Public Utility Commission (PUC) also ordered Rock Spring’s owner to negotiate a sale to the State College water authority, which has existing pipes close by.
Despite that directive, Rock Spring declined the offer and missed a June 19 deadline to file a request with the PUC to abandon service — a step needed for a municipal takeover. That means the case is now back before state regulators, which could result in the PUC forcing an acquisition.
A review of Rock Spring was launched by the Bureau of Investigation and Enforcement, a division within the PUC, last year. Determining whether the commission should order another utility to acquire the company “is in the public interest,” Carrie Wright, deputy chief prosecutor, wrote in the bureau’s petition.
Last week, an attorney for Pennsylvania American requested a conference as part of the ongoing legal process. As of Wednesday afternoon, a date has not been announced.
Rock Spring’s customers have dealt with shaky service for more than a decade as neglect led to crumbling infrastructure, low water pressure, regular outages, and sometimes lengthy boil water advisories. A Spotlight PA investigation published in June 2024 found that Rock Spring, state regulators, and elected officials failed those relying on the roughly 20-mile system.
Andrew McKinnon, a Rock Spring customer, voiced support for a municipal takeover during the June water authority meeting, saying he’d prefer public control over an investor-owned utility.
“We just feel that we’d be in much better hands if you guys purchased the system,” McKinnon told board members. “And that goes for everybody I’ve talked to, all my neighbors.”
According to a 2022 engineering assessment, Rock Spring’s system requires at least $13.5 million in repairs and upgrades.
From 2010 to 2023, Rock Spring hemorrhaged an annual average of 63% in water, according to a Spotlight PA review of reports filed with the PUC. Industry standards consider levels greater than 20% to be excessive. These losses have been the subject of a yearslong legal battle with the state Department of Environmental Protection, which has also cited Rock Spring owner J. Roy Campbell for dozens of other regulatory violations.
Pennsylvania American has made improvements to Rock Spring’s system since March and earned a passing inspection from the DEP but declined to disclose how much it has spent on infrastructure.
Campbell also faces separate charges of false imprisonment and harassment after allegedly holding a woman against her will on a Ferguson Township roadway. According to the affidavit of probable cause, police were dispatched to Beaver Branch Road on the afternoon of May 11 and found Campbell standing in front of the caller’s vehicle. He reportedly told an officer the woman had been “snooping around” and claimed he “had to hold her” until police arrived. Campbell waived his preliminary hearing, and his formal arraignment is scheduled for July 16.
Jeffrey Kern, chair of the State College water authority, expressed disappointment over the rejection during last week’s board meeting. He said he believed the $65,000 offer — which was determined based on an analysis by their engineers — was fair and accounted for what it would potentially cost to bring the system up to “usable or appropriate standards.”
Brian Heiser, the water authority’s executive director, explained at the meeting that an attorney for Rock Spring said the company “was not in agreement with the offering price” and did not counter.
In December, Campbell signed a letter of intent to sell the business to the State College water authority for the same amount. After that, the effort stalled.
Some Rock Spring shareholders thought the water authority’s offer undervalued the company, said Charles Williams, who inherited 12 shares from his father. By the time legal fees are paid, they would have “pennies on the dollar,” Williams told Spotlight PA.
Shareholders met in December and May, he said, and considered seeking an independent appraisal, but the deadline was too tight. Instead, they directed attorney Rodney Beard — who could not be reached for comment — to explore other potential buyers. According to Williams, shareholders never held a vote on the water authority’s formal offer.
Williams said he hasn’t heard any updates since late May and isn’t sure whether negotiations with other companies are ongoing.
Rock Spring owners did not respond to questions about why they rejected the municipal authority’s offer or whether they are in talks with other potential buyers.
Still, the water authority remains committed to acquiring Rock Spring, Kern said.
“We are willing to take it over at any moment because we consider it part of what we do for this area, and it’s a part of our task in life to do that,” Kern said. “But we’re kind of at a loss of … how we can go forward.”
For now, Pennsylvania American continues to manage Rock Spring as regulators resume the legal process that could force a sale.