NASHUA, NH, July 25, 2008 -- The New Hampshire Public Utilities Commission has approved plans by the City of Nashua to take the assets of Pennichuck Water Works by eminent domain, fixing the price for the acquisition at $203 million. The decision culminates more than four years of litigation and requires ratification by the City.
Pennichuck Water Works, the state's largest water utility with approximately 25,000 customers, is a wholly owned subsidiary of the publicly traded Pennichuck Corporation. Earlier in the proceeding, the Commission ruled that Nashua could not municipalize two smaller Pennichuck Corporation subsidiaries, Pennichuck East Utility and Pittsfield Aqueduct Company.
The three-member Commission unanimously agreed in its 101-page order that the taking is in the public interest, a determination required by New Hampshire's utility municipalization statute, RSA Chapter 38. Chairman Thomas B. Getz and Commissioner Graham W. Morrison adopted the $203 million figure as the fair market value of the assets Nashua plans to municipalize. Concurring in part and dissenting in part, Commissioner Clifton C. Below wrote that he would have set the value at $151 million. All three Commissioners agreed that Nashua should place an additional $40 million in a mitigation fund to protect the interests of the nearly 7,000 customers of Pennichuck East and Pittsfield Aqueduct.
"Few proceedings conducted before the Commission over its many decades of existence have been as challenging to the participants as this one," the Commission noted in its order, expressing confidence that either the City or the utility's current ownership could operate the Pennichuck Water Works System responsibly.
Nashua began the process of municipalizing Pennichuck Water Works in November 2002, when its Board of Alderman voted to move forward with the acquisition. Nashua was unable to negotiate a sale and, thus, commenced formal proceedings before the Commission in April 2004. In part because of ultimately unsuccessful efforts by Pennichuck to enjoin the Commission proceedings in Superior Court, the case did not progress to full hearing before the Commission until January 2007.
Following two days of hearings in January 2007, the Commission stayed the proceeding for several months at the joint request of Nashua and Pennichuck Water Works to give them an opportunity to negotiate a settlement. The negotiations were unsuccessful and hearings resumed in September 2007. The Commission ultimately heard 12 days of testimony from witnesses that included municipal officials, key utility employees, valuation experts, members of the Commission Staff and customers.
The decision is subject to a 30-day period for rehearing requests and possible appeal to the New Hampshire Supreme Court.
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