Philadelphia Suburban to sell AquaSource Connecticut and New York operations
Philadelphia Suburban Corp. has reached an agreement to sell the Connecticut and New York operations of subsidiary AquaSource to Birmingham Utilities of Ansonia, Conn.
Birmingham Utilities of Ansonia, CT to become new owner
BRYN MAWR, Pa., May 20, 2003 -- Philadelphia Suburban Corp., has reached an agreement of sale with Birmingham Utilities, Inc. and Birmingham H2O Services, Inc. to sell the regulated and non-regulated Connecticut operations and the regulated New York operations of AquaSource, Inc. to Birmingham for an aggregate purchase price of approximately $5 million.
The sale is contingent upon the successful closing of PSC's purchase of AquaSource utility systems (which include the Connecticut and New York operations) pursuant to the previously announced purchase agreement with DQE, Inc. That closing is expected to take place in the third quarter.
In July 2002, PSC announced that it had reached an agreement with DQE, Inc. and its subsidiary AquaSource, Inc. to purchase AquaSource's investor-owned water and wastewater systems and assume selected integrated operating and maintenance contracts.
The sale of the Connecticut and New York regulated AquaSource operations to Birmingham Utilities is subject to state regulatory approvals. PSC recently received regulatory approval from Connecticut and New York to purchase these systems from DQE.
However, PSC's purchase of the AquaSource utility systems requires the regulatory approvals in 10 additional jurisdictions, nine of which have already been secured. PSC and DQE are awaiting regulatory approval from the New Jersey Board of Public Utilities
PSC Chairman Nicholas DeBenedictis said that the pending sale of the Connecticut and New York operations makes sense because of their small size in comparison to the other AquaSource systems and the fact that PSC also has no other utility operations in those states.
"Collectively, the regulated AquaSource operations we are purchasing serve approximately 130,000 customer accounts, the vast majority of which are in Texas, Florida, Virginia, Indiana, North Carolina, New Jersey and Missouri. Connecticut and New York together make up a small part of the entire AquaSource system with just 2,400 and 1,100 customers respectively," said DeBenedictis.
"With such a small customer complement and no existing PSC operations in those states, it didn't make much sense for us to apply the resources necessary to manage those operations--particularly with a willing and capable buyer like Birmingham that already has operations in the area and can take advantage of its local economy of scale and knowledge."
Birmingham Utilities, Inc. has been in operation since 1859 and currently serves more than 9,000 customers in Ansonia, Derby and small parts of the contiguous Town of Seymour. While PSC and Birmingham will work toward closing the transactions immediately after PSC's purchase of the AquaSource, Inc. companies, the transactions require regulatory approval of utility commissions in both states.
PSC is the largest U.S.-based investor-owned water utility serving approximately two million residents in Pennsylvania, Ohio, Illinois, New Jersey, Maine, and North Carolina. PSC is a publicly traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC."