Pennsylvania American Water Acquires Steelton Water System
Pennsylvania American Water has also committed to invest approximately $36 million in improvements to Steelton’s water system over the next 10 years.
HERSHEY, PA—Pennsylvania American Water, a subsidiary of American Water, is acquiring the water assets of the Steelton Borough Authority in Dauphin County, PA, for about $22.5 million. The water system serves nearly 2,400 metered residential, commercial and large industrial connections.
Pennsylvania American Water and the Steelton Borough Authority will seek approval of the acquisition from the Pennsylvania Public Utility Commission and other necessary approvals from the Pennsylvania Department of Environmental Protection.
“We look forward to the opportunity to provide quality, reliable water service to Steelton’s homes and businesses,” says Pennsylvania American Water president Jeffrey L. McIntyre. “We are well-prepared to bring both the technical expertise and financial resources needed to ensure the system addresses all the regulatory challenges it faces now and in the future.”
Pennsylvania American Water has also committed to invest approximately $36 million in improvements to Steelton’s water system over the next 10 years.
McIntyre says the transaction will be executed under Pennsylvania’s Act 12 statute, which allows municipalities to sell water and wastewater systems for a price based on the fair market value of the facilities. Prior to the passage of Act 12, the valuation process was based on assessing the system’s original cost at the time of construction—which may be 50 years old or more—less depreciation and contributed property.
“The law enacted in 2016 now provides municipalities the opportunity to receive a purchase price that is more reflective of the current value of the system assets,” says McIntyre.
The company expects to close the transaction in the third quarter of 2019, pending regulatory approvals.
Pennsylvania American Water is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.4 million people.