Pennsylvania American Water Signs Agreement to Purchase Greene County Water System

Rhea-AI Summary

American Water (NYSE: AWK) to Acquire East Dunkard Water Authority's Assets for $5 million, Expanding Footprint in Pennsylvania. The acquisition aims to address water quality issues and aging infrastructure, with plans to invest $17 million for improvements. The agreement follows a recent vote by the authority to accept Pennsylvania American Water's offer, with the transaction expected to be completed in 2024.

Positive

• The acquisition expands American Water's footprint in Pennsylvania, potentially increasing its market share and revenue streams.
• The planned investment of $17 million in system improvements demonstrates a commitment to addressing water quality and reliability issues, potentially enhancing customer satisfaction and loyalty.

Negative

• None.

MECHANICSBURG, Pa.--(BUSINESS WIRE)-- Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it signed an agreement with East Dunkard Water Authority to purchase its water system assets for $5 million. The system serves approximately 1,600 customers in Dunkard and Greene Townships and portions of Cumberland, Monongahela, Perry, and Whitely Townships, all located in Greene County, Pennsylvania – expanding the company’s footprint to 38 counties across the Commonwealth.

The East Dunkard Water Authority has a history of water quality, service, and reliability issues due to aging infrastructure. The acquisition provides a long-term solution for a water system under a Pennsylvania Department of Environmental Protection (DEP) consent order since 2020.

“We are committing the technical expertise and resources needed to satisfy the terms of the consent order and improve service for customers,” said Pennsylvania American Water President Justin Ladner. “The company plans to invest more than $17 million in this system, which will significantly improve the water treatment plant and overall system reliability.”

Pennsylvania American Water and the Authority have explored the potential sale of its water system for the past nine months. The agreement follows a recent vote by the authority to accept Pennsylvania American Water’s offer.

“The sale of our water system to Pennsylvania American Water will unburden the authority of having to correct deficiencies in our system that we simply couldn’t afford,” said Jerry Dorsey, East Dunkard Water Board chairman. “This transaction will allow Pennsylvania American Water to work with the DEP to efficiently address needed improvements and make significant capital investments in the system. Undoubtedly, these measures will ensure that our customers receive the high-quality product and service they rightfully deserve.”

Pennsylvania American Water will adopt the authority’s current rates as part of the agreement. The Pennsylvania Public Utility Commission (PUC) regulates the company's rates, and any future rate changes would have to be reviewed and approved by the PUC. Pennsylvania American Water offers grants and discounted services to customers who qualify through its H2O Help to Others Program.

Pennsylvania American Water and East Dunkard Water Authority will seek approval of the acquisition from the PUC and DEP. The transaction is expected to be completed in 2024.

About American Water

American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people across 14 regulated jurisdictions and 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.

As one of the fastest-growing utilities in the U.S., American Water expects to invest $30 to $34 billion in infrastructure repairs and replacement, system resiliency and regulated acquisitions over the next 10 years. The company has a long-standing history of executing its core operations, aligned with sustainable best practices, through its commitments to safety, affordability, customer service, protecting the environment, an inclusive workforce and strengthening communities.

American Water has been recognized on the 2023 Bloomberg Gender-Equality Index for the fifth consecutive year, ranked 18^th on Barron’s 100 Most Sustainable U.S. Companies 2023 List, earned the U.S. Department of Homeland Security SAFETY Act designation and U.S. Environmental Protection Agency’s WaterSense® Excellence Award, among additional state, local and national recognitions.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, Twitter and Instagram.

About Pennsylvania American Water

Pennsylvania American Water, a subsidiary of American Water, is the largest investor-owned water utility in the state, providing high-quality and reliable water and wastewater services to approximately 2.3 million people.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230724261389/en/

Media:

Gary Lobaugh

Senior Manager, Government, and External Affairs - Western PA

724.944.5148

gary.lobaugh@amwater.com

Source: Pennsylvania American Water

FAQ

What is the ticker symbol of American Water?

The ticker symbol of American Water is AWK.

How many customers does the East Dunkard Water Authority serve?

The system serves approximately 1,600 customers in Dunkard and Greene Townships and portions of Cumberland, Monongahela, Perry, and Whitely Townships.

What is the expected completion date of the transaction?

The transaction is expected to be completed in 2024.

What is the total investment planned for system improvements?

Pennsylvania American Water plans to invest more than $17 million in the system to improve the water treatment plant and overall system reliability.