MECHANICSBURG, Pa.--(BUSINESS WIRE)--Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it has acquired the wastewater assets from the Township of Exeter in Berks County. The purchase price for the system, which serves more than 9,000 customers, is $93.5 million and marks Pennsylvania American Water’s fifth acquisition in 2019.
“We welcome this opportunity to provide our new customers the same high level of quality wastewater service that our current Exeter Township water customers have come to expect from our company,” said Pennsylvania American Water President Mike Doran. “We will now commit our resources to the wastewater system improving environmental compliance and dependability.”
“The sale of the wastewater treatment plant and collection system to Pennsylvania American Water is a great benefit to current and future residents of Exeter,” said John Granger, township manager. “The plant and system were becoming an increasing burden on the township as federal and state regulations were becoming too difficult for the township to manage.”
“The sale presents a unique opportunity to secure the finances of the township for residents who presently live here, while also planning for those who come later,” Granger continued. “We intend to use proceeds from the sale to eliminate all wastewater debt, make deposits into pension funds, and implement new tax exemptions – providing tax savings for all eligible residents.”
As approved by the Pennsylvania Public Utility Commission (PUC), Pennsylvania American Water has adopted Exeter’s existing sewer rates, which will now be billed monthly. The company’s rates and rules of service are regulated by the PUC and are posted on the company’s website.
Over the next three years, Pennsylvania American Water plans to invest $3 million in water and wastewater infrastructure improvements within Exeter Township.
This sale was executed under Pennsylvania’s Act 12 statute, which allows municipalities to sell water and wastewater systems for a price based on the fair market value of the facilities. Prior to the passage of Act 12, the valuation process was based on assessing the system’s original cost at the time of construction – which may be 50 years old or more – less depreciation and contributed property.
“Act 12 allows municipalities the opportunity to receive a purchase price that is more in line with the current value of its system assets,” explained Doran.
Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water and wastewater utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.4 million people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 7,100 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to more than 14 million people in 46 states. American Water provides safe, clean, affordable and reliable water and wastewater services to our customers to make sure we keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.
This release contains forward looking statements, including, among others, our plan to continue our long-term strategy of capital investment in our systems. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, changes in regulations or regulatory treatment and availability and the cost of capital. We undertake no obligation to publicly update or revise any forward-looking statement.