Water firm buy gets go-ahead

Max Jarman
The Arizona Republic
Apr. 18, 2001

American Water Works Co. is about to swallow more than 100,000 Arizona water and sewer customers and is thirsty for more.

The Arizona Corporation Commission gave its approval Tuesday for the $1.35 billion-a-year New Jersey company to acquire Citizens Utilities' Arizona water and wastewater business for $231 million. Citizens is selling the unit to focus on telecommunications services.

In Arizona, the division provides water and sewer services to Anthem, Bullhead City, Tubac and all three Sun City developments in the West Valley.

The acquisition is part of a six-state deal. American Water Works now has approval from regulators in Arizona, Ohio, Pennsylvania and Indiana, but it still needs the approval of California and Illinois officials.

American Water Works would inherit Citizens' rate structure, and customers will see no immediate change on their bills.

The deal was opposed by Arizona's consumer watchdog agency, the Residential Utility Consumer Office, which believed the affected water customers should share in a portion of the more than $71 million profit Citizens is making on the sale. The commission disagreed, citing a lack of precedent for such wealth sharing.

American Water Works provides water and sewer services to 3.5 million customers in 22 states and has operated the Paradise Valley Water Co. for more than 20 years.