Pennsylvania American Water to purchase wastewater system for $28M

Pennsylvania American Water announced that it has signed an agreement to purchase the wastewater system assets of Elizabeth Borough Municipal Authority in Allegheny County for $28 million. The system serves about 2,200 customers within Elizabeth Borough, Elizabeth Township, Forward Township, and portions of Lincoln Borough.

“Pennsylvania American Water has been providing safe drinking water to area residents for decades, and we are excited to be selected as the future wastewater provider to these Mon Valley communities,” said Justin Ladner, Pennsylvania American Water’s president. “We look forward to adding these customers to the more than 96,000 households and businesses across the Commonwealth that already rely on Pennsylvania American Water to expertly operate, manage and invest in their wastewater systems.”

The authority initially issued a request for bids in November 2021 for the potential sale of its wastewater system, citing that proceeds from the sale would be invested and used to fund other township capital improvement projects. The agreement follows a recent vote by the Elizabeth Borough Municipal Authority Board to accept Pennsylvania American Water’s bid.

“Throughout this competitive bid process, Pennsylvania American Water has reaffirmed its long-standing reputation as an excellent community partner who is dedicated to providing high-level service,” said Elizabeth Borough Mayor Barry Boucher. “The sale of our sewage system will relieve the need to continually invest in an aging system and enables our historic town to focus on more important community needs, such as taking Elizabeth back to our vibrant, traditional roots.”

Upon ownership, Pennsylvania American Water plans to invest approximately $20.4 million by 2028 to meet regulatory requirements, make targeted improvements to address inflow and infiltration, add new technology and control systems, and improve safety and security.

As part of the agreement, Pennsylvania American Water will adopt the authority’s wastewater rates at the time of closing. The company’s rates are set by the Pennsylvania Public Utility Commission (PUC), and any future rate changes would have to be reviewed and approved by the PUC.

Pennsylvania American Water and the Elizabeth Borough Municipal Authority Board will seek approval of the acquisition from the PUC and other necessary approvals from the Pennsylvania Department of Environmental Protection. The transaction is expected to close by the end of 2023 or early 2024, pending regulatory approvals.