Pennsylvania American Water Closes Three New Acquisitions to Expand Water, Wastewater Footprint

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it has closed three acquisitions and purchased the assets of water and wastewater systems serving a combined total of approximately 2,100 people. The total transaction amount of the newly acquired systems is approximately $6.9 million.

In Pike County, Pennsylvania American Water acquired the Clean Treatment Sewage Company in Delaware Township that serves approximately 1,000 residents in the Marcel Lakes Estates development. The transaction’s closing is the culmination of a May 2012 ruling by the Pennsylvania Public Utility Commission (PUC) that ordered Pennsylvania American Water to acquire the troubled wastewater operation. Since February 2005, the Clean Treatment system has been subject to a moratorium preventing additional connections due to inflow and infiltration issues and overflows in the collection system.

In its ruling, the PUC required Pennsylvania American Water to submit a plan for system improvements to the PUC and Pennsylvania Department of Environmental Protection. The company’s plan will upgrade the sewer system’s treatment and collection facilities over the next four years. Pennsylvania American Water already supplies drinking water service to residents of Marcel Lakes Estates.

“The Clean Treatment acquisition represents a challenge but also a significant opportunity for our company – and a real plus for the customers,” said Pennsylvania American Water President Kathy L. Pape. “We appreciate that the Public Utility Commission recognizes our track record in taking over troubled systems and committing the technical expertise and resources needed to bring these operations into regulatory compliance.”

Pape said, “Once we’re able to address the many operational and environmental issues, we look forward to getting permission to lift the moratorium and bring wastewater service to many of the available lots in Marcel Lakes Estates that have been in limbo for years.”

Also in Delaware Township, Pike County, the company acquired a private water system serving nearly 300 residents of the Pocono Mountain Lake Forest Estates development.

In addition, Pennsylvania American Water purchased the assets of the Franklin Township Municipal Sewer Authority in Adams County. The wastewater system serves approximately 800 people, plus nearly two dozen commercial and municipal customers. This transaction represents Pennsylvania American Water's first wastewater acquisition in Adams County, joining the company's roster of wastewater operations serving communities in Beaver, Chester, Clarion, Monroe, Pike and Washington counties.

The latest acquisitions bring the company’s total number of transactions closed so far this year to six. Pennsylvania America Water previously announced the acquisitions of the municipal wastewaster system in Koppel Borough, Beaver County; Indian Rocks Property Owners Association (water) Salem Township, Wayne County; and the Olwen Heights Water Company in Roaring Brook Township, Lackawanna County.

Pennsylvania American Water is the largest water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.2 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states and parts of Canada.

This release contains forward looking statements, including, among others, our plan to continue our long-term strategy of capital investment in our systems. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, changes in regulations or regulatory treatment and availability and the cost of capital. We undertake no obligation to publicly update or revise any forward-looking statement.