PUC approves sale of city of Coatesville Authority water/wastewater assets
The Pennsylvania PUC approved the sale of the City of Coatesville Authority water and wastewater assets to Pennsylvania-American Water Company.
HERSHEY, Pa., Feb. 8, 2001 (PRNewswire) —The Pennsylvania Public Utility Commission (PUC) approved the sale of the City of Coatesville Authority (CCA) water and wastewater assets to Pennsylvania-American Water Company (PAWC). PAWC expects to close on the $48.225 million transaction in approximately 30 days.
"We are extremely pleased with the Commission's decision and that we will have the opportunity to serve the fine citizens of Coatesville and surrounding communities," said Robert M. Ross, president and CEO of Pennsylvania-American. "It's a perfect fit for Pennsylvania-American, which already has operations in 298 municipalities in 31 counties across the state. We look forward to extending our service area to include the greater Coatesville area so that we can provide residents and businesses with the highest quality water and wastewater service possible in the years to come."
The purchase will expand the company's service territory to include an additional 8,600 water customers and 6,500 wastewater customers in 15 municipalities in Chester and Lancaster counties. "As the saying goes, `All good things come to those who wait,'" said Ross. "This was well worth the wait for PAWC and, more importantly, for the citizens of Coatesville, because they will soon begin to reap the benefits of the sale."
After paying the debts of CCA, it is estimated that the city will receive between $36 and $38 million at closing. Monies generated from the sale will be invested, and it's estimated that this money would earn $1.8 million annually, which will be used to reduce taxes, improve infrastructure and promote economic development.
Specifically, the city proposes to cut the earned income tax from 2 percent to 1 percent; reduce real estate taxes by 1 mill; and do away with occupational privilege taxes. The cuts would save residents an estimated $1.1 million a year.
In addition, the proceeds will help fund city efforts, such as the HOPE VI 24-hour community center and the business enterprise development program, and provide annual funding for the capital reserve fund and the rainy day fund. An annual contribution will also be made to the City's Economic Development Fund.
As part of the terms, PAWC has also agreed to freeze rates for three years; offer employment to all full-time employees for a minimum of 12 months; maintain the local office for six months, and thereafter select two locations within the City where customers can make walk-in payments; meet quarterly with a local advisory board, which will be appointed by the City; maintain fluoride in the water on a permanent basis; and accept donations of water and wastewater laterals.
Pennsylvania-American will assume responsibility for maintaining water and sewer laterals from the main in the street to the service line control valve, usually located at the edge of the customer's property, for those who opt to dedicate their lines now to CCA or to Pennsylvania-American within 90 days after the sale. Typical costs to maintain broken service laterals range from $2,000 to $4,000. Previously, this was the responsibility of the customer. Customers who have not returned the form to dedicate their service laterals can still do so. For a copy of the Lateral Dedication Form, contact CCA.
The water utility system stretches 24 miles from Caln Township in Chester County to Quarryville in Lancaster County. Two treatment facilities, Rock Run and Octoraro, provide the capability of supplying 7 million gallons of water a day. The wastewater system serves eight communities with the treatment facility located in South Coatesville Borough.
"Pennsylvania-American is eager to provide the same high level of service to residents and businesses in the greater Coatesville area that our current customers enjoy — service we feel our customers expect and deserve," said Ross. "We also look forward to building and maintaining quality relationships in the region and becoming an active member of the community."
Pennsylvania-American Water Company, a subsidiary of American Water Works Company (NYSE: AWK), is the largest regulated water company in the United States. The Company owns and operates 32 surface water filtration plants with a combined capacity of 332 million gallons of water per day. More than 7,700 miles of water transmission and distribution lines deliver high quality water to more than two million Pennsylvanians. American Water Works Company (NYSE: AWK), located in Voorhees, NJ, is the largest investor-owned, U.S.- based water service enterprise. The Company's utility subsidiaries and affiliates now serve over 10 million people in 1,000 communities in 23 states.
SOURCE Pennsylvania-American Water Company