Water Industry News

Don Correll of Pennichuck water calls for truce in fight over eminent domain

NASHUA -- The president and chief executive officer of Pennichuck Corp. has asked the Nashua Board of Aldermen to temporarily stop its attempted takeover of one of its waterworks and enter into negotiations for a fair settlement with the company.

Don Correll made his request to the board last Tuesday night, less than a week after both sides filed written testimony on the case with the state Public Utilities Commission, which is deciding whether municipal ownership of the company's subsidiary Pennichuck Water Works is in the public good. Correll has proposed a 60-day moratorium on filing additional legal documents, while both sides negotiate.

The company also would halt publishing advertisements in local newspapers, denouncing the city takeover.

''Let's call a time out," said Correll in a telephone interview, ''during which we can take 60 days to see if we can find areas of common interest."

Correll said Pennichuck has not submitted any specific deal to the city as a point of negotiation. He said talks could encompass such topics as selling only a limited number of assets to the city, the entire waterworks, maintaining the status quo of service without the threat of a city takeover, or reaching agreements about the company's future.

Correll said he thought it was a good idea to have these talks, given that the city initiated its quest to take over the waterworks more than three years ago and before both sides start spending massive amounts of money in legal proceedings before the Public Utilities Commission.

For the most part, the two sides have not spoken to each other since negotiations for a sale price for the waterworks broke down more than two years ago.

David Rootovich, president of the Board of Aldermen, said most board members were receptive to negotiating, but many of them don't want to delay the state regulatory approval process while the two sides talk.

''We're not going to stop proceedings at this point," he said. ''I think he sees we do have the momentum . . . [and] maybe it's time to start negotiating."

Correll said that the company will negotiate only if the city agrees to temporarily stop the legal proceedings.

The company and city are miles apart in agreeing on a value of the waterworks. Pennichuck, which is a publicly traded company based in Merrimack, says the waterworks is worth $248 million. That's more than twice the amount the city offered the company in November 2003 to buy the waterworks and two other affiliated waterworks.

Few, if any, municipalities in New Hampshire have successfully taken a public utility by eminent domain, which is allowed under state law, because the process tends to be long and expensive, according to the state Public Utilities Commission.

In recent years, Manchester and Berlin abandoned plans to acquire hydroelectric dams from Public Service of New Hampshire, the state's largest electric company.

''It's a lot to bite," said Mark Naylor, director of the gas and water division at the Public Utilities Commission.

Hudson has had the most recent success. About a decade ago, it started eminent domain proceedings to take over the water system in town that was owned and run by Consumers of New Hampshire, but ultimately the town and the company were able to agree on a sale price in private negotiations held outside the state regulatory approval process.

Nashua began its quest more than three years ago and is strongly supported by the city's mayor, Bernie Streeter, most members of the Board of Aldermen, and many residents.

While proponents of municipalization are pleased with the quality of service provided by Pennichuck, they are worried that a large conglomerate, especially one based in another country, might buy the company someday and develop the watershed with housing, offices, or a water bottling plant.

The availability of ground water is a concern that is growing across the state as residents in many communities attempt to block water plant proposals.

Pennichuck officials have said they have no plans at this time to be sold and believe that keeping the water system private will benefit customers with lower rates -- a contention the city disputes.