Pennsylvania is for-profit utilities' best friend: report

Of 22 states where for-profit water companies operate, Pennsylvania is the most business-friendly, and has been since he started keeping track in 2011, writes Ryan M. Connors, water and farming analyst at Janney Capital Markets. (Delaware, Ohio and Illinois also get high marks; Iowa, California, West Virginia and Maryland are at the other end of the scale, limiting private profits for public utilities.)

But the outlook for higher profits is bleak, Connors adds, in a report to clients. "The industry will remain in bunker mode" as long as the middle class is not "participat(ing) in the economic recovery" and state regulatory commissions try to help voters by "trying to keep a lid on rate increases."

So utilities are trying to boost profits by, for example: providing water to energy fracking operations (American Water) and "aggressive repair-tax accounting" (Aqua America).

Even in states like New Jersey, that have bought into industry arguemnts that for-profit water companies deserve to be able to charge more to expand and improve their pipes (through a Distribution System Improvement Charge), the state has appeared to tighten up on profit margins - driving the target below 10% -- which looks very much like a "quid pro quoe" and the Board of Public Utilities' way of "compensating ratepayers" for higher piping costs, even though nobody much wants to admit it, Connors wrote.