Pennsylvania American Water Co. (PAW) announced last week it is stepping away from a deal to buy the Towamencin Municipal Authority after a ruling from the state Public Utility Commission (PUC) changed the parameters of the arrangement.
“Since our last meeting, the Pennsylvania Public Utility Commission issued an order setting a formula that effectively determines what it deems to be a ‘reasonable’ purchase price for a wastewater system in a sale to a public utility,” Supervisors Chairman Chuck Wilson said during the Aug. 28 meeting.
“The purchase price Pennsylvania American Water must pay to the Township under the Asset Purchase Agreement is far higher than the PUC’s purchase price standard under its new formula. Although the PUC did recently conditionally accept PAWC’s application to purchase our system, given the new legal framework instituted by the PUC, it is very unlikely the PUC would ultimately approve the sale of our system to PAWC as currently structured,” Wilson said.
“I am asking that an item be placed on the agenda for our next meeting [Sept. 11] to terminate the APA based on this change in law and authorize all necessary actions, including signing the associated termination documentation, to do so. As you know our solicitor, Bob Iannozzi, is on vacation. When he returns, he will address this request.”
The news was greeted by applause from community opponents of the deal who attended the meeting. The four-year effort to sell the system has faced continued resistance from some residents, as well opposition from state organizations opposed to private ownership of public utilities.
The leftwing group Food and Water Watch celebrated the news, and they credited “years of successful organizing by Towamencin Neighbors Opposing Privatization Efforts (NOPE).”
“Clearly, water privatization is unwelcome across Pennsylvania,” said Ginny Marcille-Kerslake, Pennsylvania organizer at Food & Water Watch.
PAW stepped into a deal for the Towamencin Municipal Authority in March 2023 after NextEra Water Pennsylvania abandoned the $115 million agreement to buy the township’s sewer authority.
The sale of the sewer authority was a contentious issue during the 2023 election for supervisors’ seats. Sale-opponent Kofi Osei won a seat on the board in that election.
“I still feel like I’m dreaming with how abrupt it was,” said Osei. “I didn’t have any idea that Supervisor Wilson was going to announce that termination was going to be on the agenda until the words came out of his mouth. The American Water press release was at 7:20 p.m., almost as he was speaking. I am thankful that he came around for whatever the reason, but [I] do wish he chose to listen to the Towamencin residents at any of the points prior when it was clear they didn’t want a sale. The termination will feel very real to me when we take the vote at the next meeting.”
PAW President Justin Lander said his company was “grateful” as well, thanking “the Board of Supervisors for their partnership and the trust they placed in us to address their environmental compliance challenges and much-needed investment in their treatment plant.
“Unfortunately, and upon further review, we both agree the structure of the original deal is unlikely to meet the approval criteria recently established by the PUC. Pennsylvania American Water has a long history of delivering water and wastewater solutions that bring greater value to communities, and we will continue to take that same approach across the commonwealth.”
