Hershey-based Pennsylvania American Water, a subsidiary of American Water, has signed an agreement with the Butler Area Sewer Authority to purchase its wastewater system for $231.5 million.
The system serves nearly 15,000 customers over 32.5 square miles, including the City of Butler; Butler and Center townships; East Butler borough; parts of Connoquenessing borough and Summit and Oakland townships; and a small portion of Penn Township.
Pennsylvania American Water already provides drinking water to approximately 19,500 customers in the region.
As part of the agreement, the utility will offer jobs to all of Butler Area Sewer Authority’s employees; maintain the existing operations center for at least 10 years; take over the authority’s planned capital improvement projects utilizing qualified Butler-area contractors; and adopt the authority’s rates at closing with a minimum 1-year rate freeze.
Pennsylvania American Water will make necessary treatment and collection system upgrades to improve the wastewater system, expected to total more than $75 million.
Once approvals from regulators are received, the transaction is expected to close by the end of next year.
“We are pleased that BASA and other community leaders recognized the value we provide to our water customers and are entrusting us with the future ownership of their wastewater system,” Pennsylvania American Water President Mike Doran said in a release. “… Pennsylvania American Water is well positioned to step in and assume responsibility for the community’s wastewater needs by using the existing expertise of current employees, leveraged by the resources we can provide as the commonwealth’s largest water and wastewater utility.”
Paula Wolf is a freelance writer