Greetings, Magnolia Water Customers,
We are now 2600 strong with petition signatures, and committed to continuing to generate awareness of the monopoly water and sewer’s growing empire built on the backs of its customers who have experienced rate increases of 340% or more. Together, we can achieve CHANGE.
Magnolia Water Customers who paid as little as $37 for water and sewer in 2021 have experienced multiple annual rate increases, with the most recent increase to a MINIMUM of $126.80—more than triple the bill just a few years ago—even if customers do not use a single drop of water. This increase affects Magnolia Water customers throughout Louisiana on the system’s “Tier Two” rates (the majority of their customers.)
CONTINUED ACQUISITIONS OFFSETTING REVENUE - Magnolia Water began its service to Louisiana with the 2020 purchase of four systems in St. Tammany Parish. The company now operates more than 500 utility systems across Louisiana, including 209 wastewater systems acquired in 2022 by consent decree. The utility company continues to seek approval for additional acquisitions.
MAGNOLIA’S BUSINESS MODEL: FAILURE IS SUCCESS. The Three-Year Formula Rate Plan (FRP) to which CSWR/Magnolia Water and the Public Service Commission agreed ensures that should the utility company’s annual Return on Equity (ROE) fall below 9%, they are eligible to request PSC approval of a rate increase from its statewide customer base, which, essentially, means that with PSC approval, every customer is paying for the company’s continued acquisitions of failing systems. Meanwhile, the existing customer base continues to complain about frequent outages, boil water advisories, brown or discolored water as well as increases in billing now three years in a row. The more Magnolia Water “fails” to meet the ROE, the more money they make, on the backs of their customers.
DAMNING TESTIMONY RE CSWR’S BUSINESS PRACTICES – Magnolia Water’s parent company, CSWR, continues its systematic efforts to expand its customer base across multiple states while customers foot the bill. At the end of this document are links to cases reporting such. The most damning of these is the testimony of Angela Schaben, Utility Regulatory Auditor, Office of the Public Counsel, Missouri, in Case No. WR-2023-0006, vs Confluence Rivers Utility Operating Company, Inc. If you read no other attachments to this document, this one is a must-read.
Following her audit, Ms. Schaben testified, “after reviewing the Company’s goals as stated in objectives and key results (“OKRs”), it’s clear that Confluence considers identifying and obtaining more systems to be a higher priority than long term planning related to maintenance. For example, the Company does not have a long term strategy or 5 year plan for capital investments, though it now seems willing to develop one in order to qualify for WSIRA [rate increases.] The Company’s focus on acquiring new systems and lack of long-term planning of its current systems leads me to believe Confluence’s management team is not providing any real benefit to its current Missouri customers who are left in the care of third-party operators to oversee their day-to-day needs.
“I recommend the Commission disallow executive salaries from this rate case due to the excessive nature of these salaries compared to other utilities operating within the State of Missouri. Additionally, based on the overwhelming evidence related to the lack of formally adopted policies and procedures, I also recommend the Commission order a third party management report to identify Company inefficiencies including, but not limited to, internal controls and potential procurement bias practices.”
In her testimony, she states that CSWR appears especially focused on growth through acquisitions and provides generous bonuses for system acquisitions. Additionally, CSWR CEO Josiah Cox and the executive team also receive equity based compensation—so basically, the more failing systems employees find and the company acquires, the greater their bonuses.
“CSWR is hyper focused on growth through the acquisition of distressed systems, becoming a 10 top water and wastewater utility, and developing a report that public companies generally put together in order to attract investors keen on ESG initiatives. Unfortunately, the Company’s single minded focus on growth could be considered detrimental to existing customers who have experienced diminished services…Ratepayers could be harmed in more ways than one. First of all, any corporate costs, or incentive pay, related to business development, if allowed in rate base, harms customers because these costs do not add value to their water or wastewater services. Customers should not be subjected to costs for which they are receiving no benefit in return. Consequently, as CSWR’s internal operations and organizational structure currently stands, the organization itself is management top heavy.”
Based on limited public disclosure of the company’s financials plus its documented acquisition crusade, it’s highly probable that the questionable practices the Missouri state auditor brought to light in her testimony applies to company’s Louisiana business practices as well.
A quick internet search of “Central States Water Resources lawsuits” brings forth a plethora of links to lawsuits, complaints of subpar service and water quality, significant increases in customer billing, excessive compensation of CSWR and affiliate executives to offset profits and qualify for rate increases, questionable acquisitions/financial reporting, and more. (See links at the end of this update for a few of the many examples available for review.)
It would appear that Magnolia Water Company isn’t a utility company focused on serving the people. It’s a systematic billing machine driven by greed, funded by the customers who don’t have any options for alternate services short of selling their property and leaving Magnolia Water behind.
Perhaps the most disturbing find, aside from Ms. Schaben’s testimony, is a report in the La Illuminator claiming that up to 43% of PSC campaign contributions are made by the very companies Commissioners are tasked with regulating—a practice that one reporter called “Legal bribery.” How is this acceptable?
To our Public Service Commissioners: It’s time for you to DO YOUR JOBS. There is no good reason for Magnolia Water to attempt to push through the 2026-2028 FRP extension, submitted even before approval of the 2025 rate increase request. Customers find it inexcusable that the 2025 increase was approved by the LPSC given the company’s epic failure to serve its customers. Further, as noted in the original petition, the LPSC should deny any additional acquisition requests until such time as the company completes all of the system repairs as promised, repairs for which many customers have been paying for over three years now. The company's intentional failures via acquisitions of failing systems should not be rewarded.
To our legislators, we repeat the requests in the original petition: it’s time for you to protect citizens, not only from CSWR/Magnolia Water, but also from the Louisiana Public Service Commissioners who may be influenced by the abundance of campaign contributions from CSWR, Magnolia Water and CSWR affiliates in other states.
To Magnolia Water customers who feel like your voice doesn’t matter: it does. Share the petition, as the information contained within affects every Magnolia Water customer in Louisiana. The direct link is https://change.org/magnoliawatercustomers
Still in the works:
· Investigating how many of our state legislators and parish council members are also receiving “campaign contributions” from CSWR, Magnolia Water and affiliates, especially CSWR systems in other states.
· How to hold LPSC who fail to protect citizens accountable: RECALLS.
· How to hold Magnolia Water accountable: CLASS ACTION LAWSUIT.
Stay tuned!
RESOURCES:
https://lpscpubvalence.lpsc.louisiana.gov/portal/PSC/DocketDetails?docketId=32333 – This is Magnolia Water’s request to LPSC to extend the Formula Rate Plan for three more years of potential rate increases.
If you read nothing else, read this deeply disturbing testimony about Magnolia’s questionable business practices: https://efis.psc.mo.gov/Document/Display/107139 - Angela Schaben, Utility Regulatory Auditor, Office of the Public Counsel, Missouri testimony
https://lailluminator.com/2024/11/03/psc-campaign/ - Louisiana Illuminator’s coverage indicating up to 43% of PSC campaign contributions come from the companies LPSC regulates.
https://neworleanscitybusiness.com/blog/2025/08/07/magnolia-water-louisiana-expansion-rate-hikes/
https://efis.psc.mo.gov/Document/Display/107139 Missouri testimony
https://interchange.puc.texas.gov/Documents/54565_2273_1294303.PDF - CSWR - Texas
https://interchange.puc.texas.gov/search/filings/?UtilityType=A&ControlNumber=54565&ItemMatch=Equal&DocumentType=ALL&SortOrder=Ascending&Page=2 Texas PSC inundated with protests, with one of the protestors referring to the utility company as “predatory”
https://www.bbb.org/us/mo/des-peres/profile/utility-water-company/central-states-water-resources-0734-1000012679/complaints Better Business Bureau complaints re billing and quality of product