Aqua America adds Ohio water systems

Staff report

Bryn Mawr, Pa.

Aqua America has purchased new water systems as a way to strengthen its operation in Ohio and help the company take an expanded role in the shale boom.

Aqua has traded all of its New York operations to American Water Works Company Inc. to gain that company’s Ohio-based operations.

Aqua paid $101 million and assumed debt of $11 million from American. Aqua received eight additional water systems and one wastewater system in Ohio, which serve approximately 50,730 water and approximately 6,550 wastewater connections.

In a separate agreement, Aqua America sold its seven New York water systems, which serve approximately 50,520 customers, to American Water’s New York subsidiary for about $39 million in cash plus assumed debt of $23 million. The New York systems had approximately $46 million of rate base. Aqua no longer has operations in New York.

The Ohio systems serve parts of nine counties primarily in central and Northeast Ohio. The acquisition increases Aqua Ohio’s customer base by approximately 66 percent and adds approximately $95 million in additional rate base. The transaction should improve operating efficiency by spreading fixed costs over 57,280 more customers in Ohio.

Ohio is an energy-rich state that has growth opportunities in the water for energy area, said Nicholas DeBenedictis, Aqua America chairman and CEO.

“Shale drilling for natural gas is a very water-intensive business that can provide an economic boost well into the future if it’s done right environmentally,” he said.

Aqua America is the largest investor-owned water utility in Ohio.