Pennsylvania American Water acquires system in southwest Penn.

American Water announced that its subsidiary, Pennsylvania American Water, acquired the assets of the Claysville-Donegal Joint Municipal Authority (CDJMA) water and wastewater systems located in Claysville Borough and portions of Donegal and Finley townships in Washington County. The purchase price is approximately $2 million. The newly acquired systems provide drinking water to approximately 550 customers, as well as wastewater treatment services to nearly 500 customers...

• Transaction marks company's first wastewater operation in western PA

HERSHEY, PA, July 31, 2008 -- American Water announced that its subsidiary, Pennsylvania American Water, acquired the assets of the Claysville-Donegal Joint Municipal Authority (CDJMA) water and wastewater systems located in Claysville Borough and portions of Donegal and Finley townships in Washington County. The purchase price is approximately $2 million.

The newly acquired systems provide drinking water to approximately 550 customers, as well as wastewater treatment services to nearly 500 customers. The transaction represents Pennsylvania American Water's first wastewater acquisition in western Pennsylvania, joining the company's roster of wastewater operations serving approximately 14,500 customers in Monroe, Pike and Chester counties.

"This acquisition not only ensures the long-term reliability and quality of water service for these customers, but it also expands our wastewater service expertise into western Pennsylvania for the first time," said Pennsylvania American Water President Kathy L. Pape.

The Pennsylvania Public Utility Commission approved the acquisition on February 14, 2008. According to Pape, the transaction reflects CDJMA's need to divest itself of aging infrastructure, which would have required substantial capital investment. The authority also faced increased operating and inflationary-related costs and higher rates.

Pennsylvania American Water recently interconnected its existing water distribution system with CDJMA's facilities by installing approximately 14,500 feet of pipe, a pressure-reducing station and booster pumping station to serve the community and to address past water pressure issues.

The interconnection taps into an existing 10-mile water line, which Pennsylvania American Water installed in 2000 to provide service to McGuffey High School. As part of this estimated $1.3 million capital investment, the company is installing new meters for customers and a centralized data-monitoring system for an existing storage tank and booster station.

Pennsylvania American Water is also evaluating the existing wastewater system. Following this evaluation, the company expects to make the necessary capital investments to upgrade and expand the wastewater treatment facility to improve service reliability and system efficiency.

"Infrastructure investments, such as this interconnection, are critical for communities to meet increasing regulatory standards while providing quality, reliable water service and wastewater treatment," said Pape. "We hope this transaction opens the door to further regionalization of water and wastewater services, which can help communities meet the financial burden of maintaining and upgrading their systems."

Pennsylvania American Water is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to more than 2.1 million people.

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