American Water Works Company moves forward with largest privatization of a municipal system
American Water Works Company, Inc. announced today that its Pennsylvania subsidiary has received approval from the PA Public Utility Commission to purchase the water and wastewater assets of the City of Coatesville Authority (CCA). The purchase, expected to close in 30 days, marks another milestone in the companys growth strategy.
"The Coatesville system currently serves 8600 water customers and 6,500 wastewater customers, making this purchase of municipally-owned assets the largest privatization project of its kind in the nation," noted J. James Barr, president and CEO of American Water Works. "We are extremely pleased with the commissions decision and the hard work and perseverance of our management team in Pennsylvania."
Privatization in the water industry is not new. However, most of the nations large privatization projects to date have only involved transfer of operating responsibility, not asset ownership.
It is estimated that the city will receive net proceeds from the sale of $36 to $38 million after the repayment of outstanding debt. The City plans to invest that money in an irrevocable trust. The income earned by that investment will be used for economic development and other civic needs. The city has already indicated its intention to reduce taxes $1.1 million, and invest in a 24-hour community center and business enterprise development program.
"Privatization offers numerous community benefits. The CCA transaction provides tangible evidence of those benefits and will greatly strengthen our message as we reach out to other community leaders," Mr. Barr added.
American Water Works Company is the largest, investor-owned water utility enterprise in the Unites States. Its subsidiaries serve approximately 10 million people in 23 states.
Source: American Water Works Company, Inc.