Artesian Water Company Prepared to Fully Comply with EPA’s New PFAS Drinking Water Standard
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Insights
Artesian Water Company's initiative to address PFAS contamination ahead of the EPA's new regulations reflects proactive environmental governance. By installing treatment facilities early, the firm is mitigating future compliance risk and positioning itself as a leader in environmental stewardship within the utility sector. This strategy not only ensures regulatory compliance but also enhances public trust and corporate reputation, which can translate to customer loyalty and potentially a competitive advantage. The long-term foresight demonstrated by Artesian could also result in cost savings relative to peers who may face rushed compliance efforts as the 2029 deadline approaches.
It is noteworthy that the company has been involved in multi-district class action settlements, which may signal a broader industry trend of holding contaminators financially accountable. This could introduce a new dynamic in the utility industry, wherein companies may increasingly seek compensation for environmental remediation costs. The financial implications of such settlements are complex and could range from offsetting remediation costs to impacting operational expenses, depending on the outcome of litigation and the extent of contamination.
Artesian's early investment in PFAS treatment facilities is a strategic move that may have significant financial implications. On the one hand, these upfront capital expenditures could strain short-term financials, potentially affecting profit margins and earnings per share. On the other hand, by proactively addressing PFAS contamination, Artesian may avoid future fines, reduce potential litigation costs and minimize the disruption associated with retrofitting facilities closer to the regulatory deadline. Investors should monitor the balance between these upfront costs and the long-term benefits, including the potential financial relief from the class action settlements.
However, the statement that there is 'no assurance' settlements will fully offset the costs is a cautionary note for investors, indicating potential future financial exposure. The market's response to this news may depend on the perceived adequacy of Artesian's provisions for these costs and the company's ability to recover them through settlements or rate adjustments. Transparency in financial reporting regarding these liabilities will be critical for investor confidence.
The presence of PFAS in drinking water is a growing public health concern and the EPA's forthcoming MCL will set a precedent for water utilities nationwide. Artesian's early actions to install treatment systems demonstrate an understanding of the health implications associated with PFAS exposure. The technology to detect and treat PFAS at lower levels is a significant advancement in protecting public health. By ensuring that PFAS levels in their water systems were below the EPA's health advisory level even before the establishment of a formal MCL, Artesian is prioritizing customer safety and health.
This foresight may reduce health-related complaints and liabilities, which can be substantial in the utility industry. Furthermore, the involvement in class action settlements suggests that Artesian is not only taking steps to mitigate the issue but is also actively seeking recourse for the contamination, which could influence industry practices on managing and financing environmental health risks.
NEWARK, Del., April 10, 2024 (GLOBE NEWSWIRE) -- Artesian Water Company, Inc. (Artesian), a subsidiary of Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water services on the Delmarva Peninsula, announced that it is well-prepared to meet the U.S. Environmental Protection Agency’s (EPA) new drinking water standard that sets a maximum contaminant level (MCL) for certain per- and polyfluoroalkyl substances (PFAS). The MCL is expected to be effective in 2029.
Artesian has installed treatment for PFAS at ten of its facilities to date, and expects to install treatment at three more facilities in 2024. Artesian began its efforts to treat for PFAS a decade ago, well before EPA’s action to set a final drinking water standard. With advances in technology, PFAS now can be detected at significantly lower levels, allowing for enhanced monitoring capabilities and better identification of sources requiring treatment. While awaiting EPA’s determination of an MCL for PFAS in drinking water, during the past decade Artesian ensured levels of PFAS in its water systems were below the EPA’s health advisory level, EPA’s only prior available guidance.
Additionally, Artesian is among the claimants in two multi-district class action settlements designed to resolve claims for PFAS contamination in public drinking water systems. The settlements are intended to hold accountable those responsible for the PFAS contamination of water supplies for the costs of treatment. There is no assurance, however, that the settlements will completely offset the additional costs incurred to date or into the future.
“Artesian’s priority is the provision of safe, reliable water to customers. We have been at the forefront of efforts to monitor for PFAS and proactive in the installation of treatment based on the guidance available prior to EPA’s action to establish a final drinking water standard. We also believe in holding to account those responsible for the contamination of water supplies, reducing the financial burden otherwise shouldered by customers,” said Nicki Taylor, President of Artesian Water Company, Inc.
About PFAS
PFAS are a group of manufactured chemicals used since the 1940s to produce many common household and commercial products. Products that may have contained PFAS include firefighting foams, stain repellents, non-stick cookware, fast food wrappers, popcorn bags and pizza boxes. PFAS persist in the environment, thus sometimes characterized as “forever chemicals,” and over time find their way into sources of drinking water supply.
About Artesian Water Company
Artesian Water Company is the oldest and largest regulated water utility on the Delmarva Peninsula and has been providing water service since 1905. Artesian supplies 8.8 billion gallons of water per year through 1,470 miles of main to over a third of Delawareans.
Contact:
Virginia Eisenbrey
Communications
(302) 453-6900
veisenbrey@artesianwater.com
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