Aqua Pennsylvania, the Pennsylvania subsidiary of Aqua America has entered into an asset acquisition agreement with East Norriton Township, Montgomery County to acquire the wastewater assets for $21m.
Image: Aqua America to acquire wastewater assets of East Norriton Township for $21m. Photo courtesy of PinkBlue/FreeDigitalPhotos.net.
Aqua America stated that the wastewater assets serve nearly 4,950 wastewater connections and the agreement falls under Pennsylvania’s Act 12 fair market value legislation.
Aqua America chairman and CEO Christopher Franklin said that Act 12 encourages the consolidation of fragmented water and wastewater industry, allowing resources to be shared among large service area, which can benefit utility customers.
Franklin said: “Act 12 has enabled water utilities like Aqua and municipal systems like East Norriton to enter into agreements that benefit customers by ensuring professionally run, reliable service into the future.
“The legislation also provides municipalities with a fair market price for their assets, which can be used to address other important community priorities.”
Aqua Pennsylvania has three other fair market value asset purchase agreements. These include New Garden and East Bradford townships in Chester County with 2,100 and 1,200 customer connections, respectively, as well as Cheltenham Township, Montgomery County with 10,500 customer connections.
In addition to these three fair market value agreements, it has entered into an asset purchase agreement with the Borough of Phoenixville, Chester County which will add another 556 water connections outside its municipal boundary.
When completed, collectively these five agreements can allow Aqua Pennsylvania to support nearly 19,300 additional customer connections.
In late October, Aqua America had agreed to acquire Peoples Gas, a gas utility company for $4.27bn. Peoples includes Peoples Natural Gas Company, Peoples Gas Company and Delta Natural Gas Company.
The transaction will bring together the second largest water utility and the fifth largest stand-alone natural gas local distribution company in the US.
After the transaction is completed, the resultant company will serve nearly 1 million water utility customer connections and more than 740,000 gas utility customer connections.
The new company will have about $10.8bn in assets and a projected US regulated rate base of more than $7.2bn.