Aqua America Inc. said Sept. 17 its Pennsylvania subsidiary, Aqua Pennsylvania Wastewater, has signed an asset purchase agreement with the Delaware County Regional Water Quality Control Authority (DELCORA) to acquire the municipal authority’s wastewater assets for $276.5 million.
The pending transaction is subject to Pennsylvania Public Utility Commission approval.
DELCORA serves a population of approximately 500,000 people in 42 municipalities in Southeast Pennsylvania. Aqua estimates that this represents the equivalent of 165,000 retail customers. The customer base consists of retail, commercial, and industrial customers and large wholesale agreements with municipal authorities. Its assets include 168 miles of combined and separate sewer mains, 14 miles of large-diameter force mains, and a 50-million gallon-per-day wastewater treatment plant that serves the western part of its service territory. Wastewater from the eastern part of the territory is treated by Philadelphia Water Department.
Since 2016, Aqua America has acquired more than 30 water and wastewater
Prior to the agreement, DELCORA faced substantial capital investment costs to comply with U.S. Environmental Protection Agency mandates to resolve combined sewer overflow problems. The cost of these projects, and other capital investments, is estimated to be approximately $1.2 billion through 2041.
“Rather than stay the course and undertake significant projects that are expected to have high costs and dramatically increase customer rates, DELCORA decided to partner with Aqua to address these challenges,” Marc Lucca Aqua President, said. “Because of our economies of scale, technical expertise, and long-standing commitment to southeastern Pennsylvania, this partnership will benefit our current and future customers along with the region’s environment.”
Following closing, Aqua will hire all 136 current DELCORA employees, honor all DELCORA union contracts, and offer expanded professional opportunities in water and wastewater to these employees.
In October 2018, Aqua America also announced an agreement to acquire Pittsburgh-based natural gas company Peoples for $4.275 billion. This transaction, which is expected to close in 2019, will add 740,000 customers in Western Pennsylvania, Kentucky and West Virginia, and enable Aqua to expand its ongoing efforts to improve infrastructure reliability, quality of life and economic prosperity in these regions.
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