Pennsylvania PUC Grants Conditional Approval for Sale of Scranton Sewer System to Pennsylvania-American Water Company
The Pennsylvania Public Utility Commission has granted conditional approval of a Joint Application filed by Pennsylvania-American Water Company and the Sewer Authority of the City of Scranton for the sale of substantially all of the Sewer Authority of the City of Scranton’s Sewer System and Sewage Treatment Works assets, properties and rights related to its wastewater collection and treatment system. The application also sought authority for Pennsylvania-American Water Company to begin to furnish wastewater service to the public in the City of Scranton and the Borough of Dunmore, in Lackawanna County.
The Commission voted 4-1 to approve the Opinion and Order, addressing the Joint Application as well as issues that were raised in a Recommended Decision issued by the PUC’s Office of Administrative Law Judge and Exceptions and Replies that were filed by numerous parties.
A key factor to the Commission’s conditional approval of the sale is the requirement that Pennsylvania-American Water Company and Sewer Authority of the City of Scranton file an amended Asset Purchase Agreement for the transaction – including removal of the variance adjustment provisions which were originally proposed.
According to the Commission’s Order, “We note that consistent with the elimination of the variance adjustment from the purchase price, approval of this transaction is necessary for the service, accommodation, convenience or safety of the public.”
The Commission’s conditional approval also requires the filing of additional information by the parties, including:
The pro forma municipal agreements submitted by Pennsylvania-American Water Company and Sewer Authority of the City of Scranton are conditionally approved, subject to the filing of executed municipal agreements.
Pennsylvania-American Water Company shall file within ten days after the closing of the transaction, to become effective on the same date as issuance, a compliance tariff supplement consistent with the pro forma tariff supplement included in the Main Brief submitted by Pennsylvania-American Water Company and Sewer Authority of the City of Scranton.
Additionally, in a Joint Motion submitted by Commissioners Robert F. Powelson and David W. Sweet, the Commission directed that cost studies be presented by Pennsylvania-American Water Company in its next rate case to ensure appropriate rate integration between the two systems.
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