PWSA settles lawsuit, set to save nearly $5 million

The Pittsburgh Water and Sewer Authority announced Thursday it has settled a lawsuit with its former management company that will save PWSA nearly $5 million and add $500,000 to a fund that helps needy customers pay water and sewer bills.

PWSA sued Veolia North American in 2016, alleging the company mismanaged the authority for three years and was responsible for a botched rollout of automated water meters, inaccurate water bills and a 14-month change in chemicals for corrosion and lead control that violated PWSA's operating permit from the state.

The lawsuit sought up to $12.5 million in damages. Veolia had a management contract with PWSA from July 12, 2012, to Dec. 31, 2015.

Boston-based Veolia in 2017 countersued PWSA, saying the authority's “reckless and false statements” were defamatory. Veolia claimed PWSA management was responsible for erroneous billing and purchasing new water meters. It said PWSA staff switched corrosion chemicals without its knowledge. Veolia sought $4.4 million in unpaid fees and interest.

“First and foremost, were glad to have this behind us,” said John Lamontagne, Veolia's director of communications. “We're also happy to contribute to the local charity that benefits people in Pittsburgh.”

PWSA said the switch in corrosion chemicals contributed to lead levels in Pittsburgh homes that exceeded a federal threshold of 15 parts per billion. The latest round of lead tests released earlier this month indicated levels of 21 parts per billion.

Neither side admitted wrongdoing under the settlement, and both sides agreed that a variety of factors, including aging water pipes, contributed to rising lead levels in Pittsburgh's water.

That stipulation was of particular importance to Veolia because it absolved Veolia of responsibility for the lead levels, according to the company.

Veolia agreed to waive payment of fees, according to a joint statement released by both sides. The $500,000 will go to the Dollar Energy Fund, which provides billing assistance to low-income PWSA customers.

“The settlement is a favorable outcome for PWSA, our customers and the city of Pittsburgh,” said Debbie Lestitian, who chairs the PWSA board and is Mayor Bill Peduto's chief administrative officer. “We have avoided lengthy and potentially costly arbitration while bolstering our customer assistance program.”

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312, bbauder@tribweb.com or on Twitter @bobbauder.