Pa. American buys Chesco sewer system for $9.25M

Pennsylvania American Water announced Wednesday it has signed an agreement to acquire the wastewater system of Sadsbury Township in Chester County for $9.25 million. The Sadsbury collection system serves about 1,000 customers.

Pennsylvania American, which is a subsidiary of American Water Works Co. Inc. of Voorhees, said that there will be no immediate change to customers’ wastewater rates, and that any future increases will come under review of the Pennsylvania Public Utility Commission. The sale will enable Sadsbury Township to eliminate the system’s $2.5 million in debt.

The deal requires the approval of the PUC and the Pennsylvania Department of Environmental Protection. The company expects to close the transaction by the end of the 2018.

Pennsylvania American already provides water service to Sadsbury after it acquired the Coatesville water and wastewater systems in 2001. The purchase of Sadsbury’s wastewater collection system, which sends its sewage to Coatesville for treatment, will allow the company to consolidate its operations in the area and get greater scale.

“This acquisition will enable us to bring a more regional approach to wastewater solutions for western Chester County, where our Coatesville Area Wastewater Treatment Plant already serves more than 6,000 local customers,” Pennsylvania American Water president Jeffrey McIntyre said in a statement.

“We can also capitalize on increased efficiencies and economies of scale while providing the technical expertise and financial resources needed to ensure that Sadsbury’s system complies with all environmental regulations.”

After two years of negotiations, the township signed an initial agreement to sell the system to Pennsylvania American last July. The assets being sold do not include the customer service laterals that run from the curb to each customer’s homes, or any interior plumbing in homes. The township’s storm water system facilities were also not included.