Nashua Votes to Buy Water Company

Jan. 16, 2003
Nashua residents voted overwhelmingly to buy their local water company, Pennichuck Corp.

The referendum swept all nine wards of this Massachusetts border city, which has reluctantly become the poster child of suburban sprawl in New Hampshire. Its success probably scuttles the publicly-traded water company's plans to merge with the Philadelphia Suburban Corp., one of the nation's largest water suppliers.

It was the threat of that merger, compounding years of distrust resulting from Pennichuck's land sales, that led to an unusually high special election turnout of 21 percent, with supporters accounting for 78 percent of the nearly 8,400 votes.

''I knew we would win, but never in my wildest imagination did I imagine we would get 78 percent,'' said Nashua Mayor Bernie Streeter, who noted that the city would never have considered buying the company had Pennichuck not developed the watershed. ''They made millions of dollars, and not a penny went to ratepayers.''

New Hampshire law enables a municipality to take a utility by eminent domain. In light of Tuesday's vote, Pennsylvania-based Philadelphia Suburban Corp. is reevaluating the merger with Pennichuck.

In a statement, Philadelphia Suburban said the city's decision to acquire Pennichuck was so unusual, given the consolidation underway in the water industry, that the possibility of a municipal purchase was never considered when the merger agreement was signed in April. The merger is still awaiting federal, state, and shareholder approvals.

''Ironically, a significant reason for the consolidation currently taking place in the water industry is that the municipally-owned water systems are facing the challenge of complying with new stringent drinking water regulations that require technical expertise and significant technology and capital improvement,'' the statement read.

If the merger collapses, Nashua still intends to push ahead with the municipal purchase, aware that Pennichuck could become a takeover target of another out-of-state company. A municipally-owned Pennichuck would be run by a regional water district including many of the two dozen communities currently served by Pennichuck. Communities throughout southern New Hampshire will vote at town meetings in March whether they want an ownership stake in the regional district. The state public utilities commission must also approve any purchase.

City officials estimate the total cost, which would include infrastructure improvements, could run as high as $167 million.

''With this type of decisive opinion of the people,'' said Barbara Pressly, a former Nashua state senator who has led the charge for a regional water district, ''I think the Public Utilities Commission and Philadelphia Suburban will reconsider what's the wise thing to do.''

Source: Boston Globe

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