Pennsylvania American Water announces three municipal water system acquisitions

HERSHEY, PA, Oct. 1, 2009 -- Pennsylvania American Water, a wholly owned subsidiary of American Water, announced today that it has acquired three water systems from municipal authorities in northcentral and western Pennsylvania...

HERSHEY, PA, Oct. 1, 2009 -- Pennsylvania American Water, a wholly owned subsidiary of American Water, announced today that it has acquired three water systems from municipal authorities in northcentral and western Pennsylvania. The combined purchase price of the newly acquired systems, which serve a total of nearly 600 people in Clearfield, Centre and Washington counties, is approximately $935,000.

In Clearfield County, Pennsylvania American Water purchased the assets of the Wallaceton Municipal Authority, which is adjacent to the company's Philipsburg water system. According to Pennsylvania American Water President Kathy L. Pape, the acquisition provides a long-term solution for the Wallaceton community, which faced a Department of Environmental Protection (DEP) consent order over water quality concerns with the existing source of supply.

"The consent order had required the authority to obtain a new supply source or build additional treatment facilities, which would have placed a heavy financial burden on the authority and its customers," said Pape. "With this transaction, we have interconnected the Wallaceton community with our adjacent water system, providing residents with quality water service at a reasonable cost."

Pape noted that funding from DEP's Bureau of Mine Reclamation helped pay for nearly four miles of interconnecting pipe to extend public water service to a group of homeowners whose wells were adversely affected by past coal-mining operations. "This success story is the result of a true public-private partnership, with DEP-BAMR, Representative Camille 'Bud' George, Pennsylvania Infrastructure Investment Authority (PENNVEST) and the Wallaceton Municipal Authority all pulling together with Pennsylvania American Water to make the interconnection possible."

Over the next few years, the Wallaceton system also will see a number of capital improvements to enhance the community's water service and fire protection. Pennsylvania American Water plans to construct a 135,000-gallon water tank to expand storage capacity, install new fire hydrants, and replace more than 19,000 feet of aging cast iron and transite water main with new ductile iron pipe. Under terms of the purchase agreement approved by the Pennsylvania Public Utility Commission, the company will also install new water meters for all of the system's customers.

In Centre County, the company acquired the water system operated by the Boggs Township Municipal Authority, serving primarily commercial and industrial customers along the Interstate 80 corridor. Pennsylvania American Water also purchased the assets of the Amwell Township Water Authority in Washington County, where the company already serves approximately 150,000 people.

"These transactions not only help expand our customer base, but they also provide important long-term solutions to residents and municipalities that are facing significant water infrastructure needs," said Pennsylvania American Water President Kathy L. Pape. "We continue to seek acquisition opportunities that deliver increased economies of scale through regionalization, which capitalizes on the technical expertise and resources that we can bring to communities across the commonwealth."

Pape called the Wallaceton transaction a prime example of water system regionalization, since it represents the company's seventh acquisition in the Philipsburg, Clearfield County area in the past 20 years.

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 million people. Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 15 million people in 32 states and Ontario, Canada. More information can be found by visiting www.amwater.com.

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