July 2016, Vol. 71 No. 7
Newsline
Pennsylvania American Water To Acquire New Cumberland Wastewater System
Pennsylvania American Water, a subsidiary of American Water, announced it reached an agreement to acquire the wastewater assets of the Borough of New Cumberland in Cumberland County, earlier this year.
Pennsylvania American Water and the Borough will seek approval of the acquisition from the Pennsylvania Public Utility Commission (PUC) and its necessary approvals from the Pennsylvania Department of Environmental Protection. The signing of the purchase agreement – with a total value of approximately $23 million – is the result of negotiations between officials of Pennsylvania American Water and the Borough. The Borough Council unanimously voted in favor of acceptance of the proposal in March 2016, after the initial issue of a request for bids in January 2016.
Pennsylvania American Water President Kathy Pape said the company and its employees are excited to expand their wastewater service to provide for New Cumberland customers, which includes approximately 3,100 residents.
Pape said long-term rate stability is one of the most important benefits for wastewater customers, who faced the potential of substantial rate increases if the Borough continued operation of the system. Under the purchase agreement, Pennsylvania American Water will not change wastewater rates earlier than Jan. 1, 2018, with a maximum 2.5 percent increase in 2018 and 2019. The company’s rates are regulated by the PUC and future rate changes would need review and approval of the PUC.
In addition, the purchase agreement allows the Borough to eliminate all debt, which stands at approximately $16 million, by retiring outstanding bonds within the next three years.
Pennsylvania American Water also committed to invest $2 million in wastewater and/or water improvements within New Cumberland over the next five years. The company will partner with the Borough to determine areas where aging facilities can be replaced in conjunction with street and sidewalk improvements.
The transaction is expected to close by the conclusion of 2016, pending regulatory regulations.
610-670-7789, www.amwater.com.
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