Water Utility

On June 29, Philadelphia Suburban Corp. announced a $460 million acquisition that vaulted the Bryn Mawr company from third place to second among U.S. investor-owned water companies. The purchase of Consumers Water Co. was the 25th for Philadelphia Suburban since 1992, and the largest in the history of the U.S. water business - for about three months. Last month, American Water Works Co., of Voorhees, announced its own blockbuster: a $700 million acquisition that solidified its position as the nation's largest investor-owned water utility.

American Water Works Co. Inc., Voorhees, said it raised its dividend by a penny, or 5 percent, to 22 cents a share. The new dividend, payable Sept. 1 to shareholders on Aug. 18, marks the second increase since the company had its initial public offering of stock in April 2008. American Water provides drinking water and wastewater services to 16 million people in the United States and Canada.    - Paul Schweizer

Faced with the rising costs and administrative headaches of running its own water company, city officials are thinking about putting the utility up for sale. "It's getting really tough" to operate the water company, said city administrator Ed Doczy. "We've either got to sell the system or, if we retain the company, we've got to figure out a way to make it more profitable. " Running its own water company requires the city to keep up with mandated testing regulations, meter reading and pipe repairs.

American Water Works Co. Inc. is like a ship emerging from an eight-year storm. Smoother sailing is forecast. But the company is still emptying its bilge after taking on some water in the tempest. The Voorhees company, the nation's largest investor-owned water utility, has weathered quite a corporate adventure since German utility giant RWE AG initiated a $7.6 billion buyout in 2001. RWE paid a 36.5 percent premium to acquire American and merge it with its British water utility, investing two years getting regulatory approval for the deal.

American Water Works Co. Inc., of Voorhees, yesterday said it was buying the troubled water operations of Pennsylvania Gas & Water Co. for $409 million in what it called the most expensive water-utility acquisition ever. PG&W serves about 133,000 water customers in 62 communities in northeastern Pennsylvania, including Scranton and Wilkes-Barre. It was forced to invest heavily in filtration systems in the 1980s after its reservoirs became contaminated and customers got sick. "A lot of people in Scranton to this date won't drink the water," said Pennsylvania Consumer Advocate Irwin A. Popowski.

Water certainly looks like a liquid asset these days. American Water Works Co. Inc. yesterday reported a surge in first-quarter profits that it attributed to reductions in expenses and strong sales because of the mild winter. Earnings per share increased 27 percent to 38 cents. Three analysts survey by Zacks Investment Research had forecast earnings for the company in a range of 30 cents to 35 cents per share. The Voorhees utility, which announced on Wednesday that it was buying the water operations of Wilkes Barre-based Pennsylvania Gas & Water Co., also said its sales should increase this year if regulators approve the dozen rate increases it has pending across the country.

Chicago-based U.S. Water's final proposal to operate Camden County's sprawling wastewater treatment plant does not yield significant savings and would not be in the best interest of county taxpayers, the County Board of Chosen Freeholders said yesterday. Freeholder Director Jeffrey Nash said that when privatization talks began almost two years ago, the Camden County Municipal Utilities Authority had a bloated bureaucracy and budget, making such a move desirable. Since that time, however, the authority has dramatically slashed its operating budget, making it tougher for a private company to compete.

When thirsty Pennsylvanians opened their taps during the steamy summer of '91, American Water Works opened its pipelines. When Illinois farmers pumped up their irrigation systems, American Water Works moistened their dry crops. And when Arizona parks filled up their public swimming holes, American Water Works soaked the fun spots. All through the summer, revenues at American Water Works Co. Inc. gushed. The Voorhees, N.J., holding company is in the business of water - pumping it out of rivers and underground reservoirs, making it potable and delivering it to homes, offices, factories and firehouses.

Sell high. Sell some. Don't sell at all. Like stockbrokers who disagree over what to with their holdings, borough officials have long been at odds over what to do with a major asset: Phoenixville's troubled water system. And when Borough Council voted 6-2 in October to sell a portion of the borough water utility known as the Schuylkill Water Franchise to Philadelphia Suburban Water Co. for $1 million, the naysayers were not ready to give up on their business strategies. Now, one of those opponents is trying to prevent the sale of the Schuylkill Water Franchise - which PSW executives still see as virtually a done deal - via petitions that would force the issue to a referendum on the November ballot.

The Chester Water Authority is the leading bidder to buy the City of Coatesville Authority's water and sewer systems, offering a combined $47,050,000. For more than a year, Coatesville officials have been trying to sell the systems to give the economically strapped city an infusion of cash. The authority has about $20 million in debt, which would be deducted from the sale price. The first bids were unsealed at 2 p.m. in the authority's offices Friday. The Chester authority offered $36,025,000 for the water utility, edging out Pennsylvania-American Water Co.'s $36,000,000 bid. It also offered $11,025,000 for the sewer system - the only bid. Earlier this week, Philadelphia Suburban Water Co. dropped out of the bidding, criticizing the Coatesville authority's handling of the sales process and suggesting a possible legal challenge.

The 10,235 customers of the Newtown Artesian Water Co. in Bucks County could be in for a rate shock. The Pennsylvania Public Utility Commission today voted to consider the company's proposed 18.6 percent rate increase, which would generate $1 million more a year in revenue. A decision on the request will be made by Dec. 1.    -Andrew Maykuth

American Water Works Co. Inc., Voorhees, said it raised its dividend by a penny, or 5 percent, to 22 cents a share. The new dividend, payable Sept. 1 to shareholders on Aug. 18, marks the second increase since the company had its initial public offering of stock in April 2008. American Water provides drinking water and wastewater services to 16 million people in the United States and Canada.    - Paul Schweizer

James V. LaFrankie, 82, retired head of American Water and a former Moorestown resident, died Thursday of melanoma at home in Cary, N.C. In 1984, Mr. LaFrankie became president of American Water, which operated water utilities in 20 states. He had begun working for the company in 1948 as a part-time shipping clerk while in college. When Congress extended the EPA's mandate to clean up the nation's drinking water in 1986, Mr. LaFrankie told The Inquirer that American Water was in a position to take over local waterworks and upgrade their facilities to comply with the myriad new rules for purity including reducing lead, radon, and other contaminants.

American Water Works Co. Inc. is like a ship emerging from an eight-year storm. Smoother sailing is forecast. But the company is still emptying its bilge after taking on some water in the tempest. The Voorhees company, the nation's largest investor-owned water utility, has weathered quite a corporate adventure since German utility giant RWE AG initiated a $7.6 billion buyout in 2001. RWE paid a 36.5 percent premium to acquire American and merge it with its British water utility, investing two years getting regulatory approval for the deal.

Mark Kropilak Senior vice president of corporate development - i.e. the growth guy - for Aqua America, the water utility holding company based in Bryn Mawr. Under Kropilak's steady hand, the company has morphed from regional company to national player, serving more than 2.8 million residents in more than a dozen states. And he's not just a salesman: Kropilak, his wife and two teenage sons live in Valley Forge, in an Aqua-serviced area. No Brita water filters at his house: He joked that the water is so pure "I don't even use a cup. " How he got into the water game: Kropilak was first driven by legal aspirations.

Mark Kropilak   Senior vice president of corporate development - i.e. the growth guy - for Aqua America, the water utility holding company based in Bryn Mawr. Under Kropilak's steady hand, the company has morphed from regional company to national player, serving more than 2.8 million residents in more than a dozen states. And he's not just a salesman: Kropilak, his wife and two teenage sons live in Valley Forge, in an Aqua-serviced area. No Brita water filters at his house: He joked that the water is so pure, "I don't even use a cup. " How he got into the water game: Kropilak was first driven by legal aspirations.

When I was practicing law before the Pennsylvania Public Utility Commission (PUC) in the early '90s, I witnessed the start of a trend: Water systems owned by the taxpayers through their township, borough or municipal governments were being purchased by private companies. My colleagues and I often wondered what the consequences would be of these purchases; our fear was that small townships and boroughs, strapped for cash and afraid of ever-increasing future liabilities, would sell their water systems to private companies which, in turn, would move to substantially increase rates.

Residential water bills for most of Aqua Pennsylvania's 340,000 customers in the Philadelphia suburbs would rise about 14.4 percent next year, under a rate proposal under review by the Pennsylvania Public Utility Commission. The rate plan, which state Consumer Advocate Irwin "Sonny" Popowsky said yesterday that he would challenge, would increase a typical residential customer's bill from $37.86 a month to $43.30 a month. Rate changes could be steeper on a percentage basis for customers of some systems, such as those in Bensalem and Bristol, that Aqua Pennsylvania has recently acquired.

Clarence L. "Skip" Reynolds, 77, formerly of Media, a civil engineer who was a leader in the development of water conservation and purification systems, died of cancer Monday at Greenspring Village, a retirement community in Springfield, Va. Mr. Reynolds retired as vice president of engineering and management at General Waterworks Corp. in Bryn Mawr in 1993. He had worked for the water utility company for 25 years, first in Miami and later in Philadelphia and Bryn Mawr. While in Miami, he developed a system of deep wells to provide an alternative to discharging wastewater into the ecologically fragile Everglades.

It may work for cream cheese, but when it comes to drinking water, the name "Philadelphia" doesn't exactly spring to mind. So Philadelphia Suburban Corp., the water utility serving much of suburban Southeastern Pennsylvania and operating in 15 states in all, has a new identity on tap. Starting Oct. 10, the publicly traded company's name will be Aqua America Inc., chosen to reflect the firm's increasingly national footprint and because that name is thought to have a better chance of winning new investors outside of the Philadelphia region.