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November 23, 2010

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United Water and Indianapolis Receive NACWA Awards for Environmental Performance

United Water and the City of Indianapolis were recently honored with two Platinum Peak Performance Awards from the National Association of Clean Water Agencies (NACWA). The awards recognize the partnership’s contributions to environmental protection and the clean water community.

United Water operates Indianopolis’ two advanced wastewater treatment plants, which have a combined capacity of 250 million gallons per day. The Platinum Awards, which were presented at NACWA’s annual conference in San Francisco, Calif., signify that each treatment plant was 100 percent compliant with environmental discharge standards in 2009.

In addition, the awards recognize that both wastewater treatment plants have had an extraordinary record for several consecutive years. The Southport Advanced Wastewater Treatment Plant has six years of 100 percent compliance, while the Belmont Advanced Wastewater Treatment Plant has maintained a perfect compliance record for the last 13 years.

“The Platinum Peak Performance Awards demonstrate that our continued commitment to operating efficiently and protecting the environment is recognized within our industry,” said David Sherman, director of the Indianapolis Department of Public Works. “I congratulate my staff, as well as our operating partner, United Water, for their achievements. This is also a testament to the solid partnership between United Water and the City of Indianapolis, and we are proud of that.”

“The accomplishments in Indianapolis exemplify United Water’s commitment to protecting the environment, safeguarding the nation’s water supplies and making a positive difference in the communities we serve,” said Tom Brown, president of United Water Environmental Services. ”We are honored to be part of this wonderful city and we are focused on operating the facilities in a manner which helps protect the environment for generations to come.”

United Water has been operating the city’s wastewater facilities since 1994. In addition to the wastewater treatment plants, which serve 800,000 residents and 41,000 businesses, the company is also responsible for the collection system, the Eagle Creek Dam, laboratory services and industrial pretreatment monitoring.


American Water's Mark LeChevallier Appointed Chairman of WateReuse Research Foundation Committee

American Water Works Company, Inc., announced Dr. Mark LeChevallier has been appointed chairman of the Research Advisory Committee (RAC) for the WateReuse Research Foundation. His appointment takes effect on Jan. 1, 2011.

LeChevallier has been with American Water for 25 years and currently serves as director of innovation and environmental stewardship. In this role, he directs the research, environmental management and environmental compliance programs—which include environmental audits, development of a national cross connection control program, and implementation of environmental stewardship and greenhouse gas control programs—for more than 1,000 operating centers,

LeChevallier currently serves as the chairman of the Peer Review Editorial Board for the Journal of the American Water Works Association, and the chairman of the AWWA Total Coliform Rule Technical Action Workgroup. He was a negotiator representing the NAWC on the U.S. EPA Federal Advisory Committee for revisions to the Total Coliform Rule, and served on the Research and Information Collection Partnership panel for research to develop the Distribution System Rule. He was a member of the Distribution System Committee for the National Academy of Sciences' National Research Council. LeChevallier is also the past chairman of the AWWA Water Science and Research Division, the past chairman of Division Q of the American Society for Microbiology, a past member of the Applied and Environmental Microbiology editorial board, and past chairman of the Unsolicited Proposal Review Committee for the Water Research Foundation. He has served several terms as a member and subgroup chairman of the AWWA Research Foundation Research Advisory Committee, and is currently a member of the Strategic Initiative group, which is directing a $5 million, five-year program on distribution system research.

LeChevallier is a member of the American Water Works Association, the American Society for Microbiology, the World Health Organization's Drinking Water Revision Committee, the International UV Association, and the International Water Quality Association.

The WateReuse Research Foundation is the research arm of the WateReuse Association. The mission of the WateReuse Research Foundation is to conduct and promote applied research on the reclamation, recycling, reuse and desalination of water. The Research Foundation is an educational, nonprofit public benefit 501(c)(3) corporation that conducts applied research on behalf of the water and wastewater community for the purpose of advancing the science of water reuse, recycling, reclamation and desalination. The Foundation's research supports communities across the United States and abroad in their efforts to create new sources of high-quality water while protecting public health and the environment. More information can be found here.


Aqua America Chairman: Investor-Owned Water Utilities Lead the Way on Needed U.S. Infrastructure Investments

Investor-owned water and wastewater companies like Aqua America are leading the way in solving America's water and wastewater utility infrastructure needs, according to Aqua America, Inc., Chairman Nicholas DeBenedictis. Speaking before the National Association of Regulatory Utility Commissioners (NARUC) at its annual conference in Atlanta, DeBenedictis cited the more than $300 million Aqua America is investing in infrastructure this year, as well as its plans to invest $1.5 billion over the next five years.

"God continues to give us the water for free, but he's left the cost of laying the pipe and building the treatment facilities to us," said DeBenedictis. "Unfortunately, in too many cases many of the treatment facilities and much of the pipe are reaching or have passed the end of their useful life, and now is the time to invest in America. Water utilities are the most capital-intensive of all the utilities, having to invest more capital per dollar of revenue earned than any of the utilities, including electric, gas, telephone and cable."

"Recent headlines in major national newspapers, supported by data from the U.S. EPA and the American Society of Civil engineers, have provided great detail on the gravity of the problem," said DeBenedictis, adding that while the nation's drinking water and wastewater systems are in disrepair, the news is not entirely bad. "We have a great chance to make lemonade out of lemons, and that's what we're doing at Aqua America. "

"When you look at what types of companies are actually putting their dollars and cents into the U.S. economy, the large, regulated utilities are right there leading the way," DeBenedictis added. "And if you look further at how we're investing those dollars—replacing aged water mains and treatment plants to provide safer and more reliable service to our customers—you will see why utilities like Aqua America have played and will continue to play a key role in the solution to the restoration of our nation's water and wastewater infrastructure. "

"At Aqua America, we have used our strong balance sheet and credit ratings, which have afforded us record-low borrowing rates, to access the capital markets so we can rebuild our nation's water and wastewater systems," DeBenedictis said. "With the help of our shareholders—many of whom are attracted to our stock because of the dividend—we have virtually created our own economic stimulus plan, which has had a positive impact on the economies of the areas we serve by creating jobs and a sustainable water and wastewater infrastructure to support business."

DeBenedictis said that even after undertaking its major capital investment program, water is still among the cheapest of the utilities at a cost of about a dollar per day. This cost efficiency is important because pricing to pay for all this capital investment is permitted by various state regulatory bodies, which understand the need for consistent investment in the nation's water infrastructure.


Pennichuck Corporation Agrees to be Acquired by City of Nashua

Pennichuck Corporation announced that it has entered into a definitive merger agreement with the City of Nashua, New Hampshire pursuant to which the city will, subject to a number of conditions precedent and contingencies, purchase all of the outstanding common stock and common stock equivalents of the company for $29.00 per share, or approximately $138 million, in cash. After taking into account the company’s outstanding debt, the transaction represents a total enterprise value of approximately $200 million.

While the Merger Agreement was executed and made effective on November 11, 2010, under New Hampshire law an affirmative vote of not less than two-thirds of the City’s Board of Aldermen within the time period set by law (as explained below) is required to approve and ratify the Merger Agreement and the related financing. Accordingly, unless and until such a timely positive vote is obtained, the Merger Agreement is not binding on the city in any respect.

Consummation of the transaction is also subject to advance approval by the New Hampshire Public Utilities Commission pursuant to New Hampshire law, including the state’s utility municipalization statute RSA 38 and special 2007 legislation relating to the city’s right to purchase and hold the company’s common stock. The company cannot predict how or when the NHPUC will rule on the transaction. However, the company believes the review process, which is expected to include notice to interested parties, public hearings, discovery and testimony by the city, the company and other interested parties, may extend into the second half of calendar 2011. The city’s obligation to complete the transaction is subject to there being no approval conditions imposed by the NHPUC that would materially adversely affect the city’s expected economic benefits from the transaction.

The company and the city intend that this transaction be in full settlement of their eminent domain dispute and the related proceeding currently before the NHPUC pursuant to which the city has been attempting to take by condemnation (i.e., eminent domain) the operating assets of the company’s Pennichuck Water Works, Inc. regulated utility subsidiary. Under New Hampshire statute RSA 38:13, in the case of a condemnation taking or an agreed sale under threat of condemnation, “the final determination of the price to be paid” triggers a 90-day period within which the municipality must decide by vote of its governing body if it wants to consummate the acquisition. It is the company’s contention that with respect to events occurring prior to the November 11, 2010 effective date of the Merger Agreement, including the March 2010 decision of the New Hampshire Supreme Court affirming the order of the NHPUC, there was no final determination of the price and, therefore, the 90-day period was not triggered. If this is ultimately determined to be incorrect, the company and the city may be precluded, by operation of state law, from entering into a consensual settlement agreement for a period of two years and then only after obtaining a new majority public vote.

The company believes that the November 11, 2010 effective date of the Merger Agreement first established the required final determination of price and has now triggered the commencement of the 90-day period. Accordingly, pursuant to the terms of the Merger Agreement, the city has agreed that, after public hearings are held and within this 90-day period, its Board of Aldermen will meet to take a vote pursuant to RSA 38:13. As previously explained, an affirmative vote of not less than two-thirds of the city’s Aldermanic Board is required to approve and ratify the Merger Agreement, as well as the related financing. By operation of law, until and unless such a positive vote is obtained, the Merger Agreement is not binding on the city in any respect. If the city’s Aldermanic Board does not vote in favor of the Merger Agreement, the company will have no recourse against the city under the terms of the Merger Agreement, except that the pending eminent domain proceeding would then be terminated. The company does not intend to file its proxy statement relating to the proposed merger unless the city’s Aldermanic Board votes in favor of the Merger Agreement.

Pursuant to the terms of the Merger Agreement, the company may continue paying regular quarterly dividends until the closing date at a rate no greater than the current annualized rate of $0.74 per common share. The company has suspended, however, its dividend reinvestment plan. Separately, PWW and the company’s Pittsfield Aqueduct Company, Inc. regulated utility subsidiary will continue their currently active rate relief cases before the NHPUC.

Closing of this transaction is also subject to (i) approval by the holders of not less than two-thirds of the outstanding shares of the company’s common stock, and (ii) Nashua’s ability to obtain appropriate financing after all conditions precedent (including those specified above and other customary closing conditions) have been met. While the city’s financing structure is subject to change by the city, the company currently expects that the city will finance the acquisition by issuing general obligation bonds, the interest on which will be taxable under federal and state law.

Commenting on the acquisition transaction, Duane C. Montopoli, Pennichuck’s President and Chief Executive, said, “While we believe the NHPUC got the 2008 valuation of PWW’s assets and the amount of the mitigation reserve about right, this stock sale will enable our shareholders to avoid double-taxation and the city will acquire more assets at a lower total cost than would apply in a condemnation taking. Consequently, this is a true win-win outcome for both the company’s shareholders and the citizens of Nashua.”

He added, “I am also particularly pleased that we have been able to resolve this dispute in a manner that will allow our workforce to continue providing exceptional service to the customers and communities we serve.”

Also commenting on this development, Dr. John R. Kreick, Pennichuck’s Chairman, said, “While more remains to be done, reaching this agreement with the City of Nashua is a significant event. I would like to congratulate the teams from the city and the company who have accomplished this task. I would especially like to thank the Pennichuck employees, who have continued to reliably provide safe water for our customers, despite the uncertainty created by the eminent domain procedures. Job well done and keep up the good work.”

While the company and the city are committed to completing this transaction as quickly as possible, it is not possible to predict whether all the approvals, contingencies and other conditions precedent to closing will be obtained, resolved or satisfied, as applicable, and therefore if and when the transaction will close. The company and the city have concurrently entered into a Settlement Agreement which ensures that the current eminent domain proceeding brought by the city against the company will be terminated even if the proposed acquisition ultimately is not completed.


Artesian Resources Water Expert Bruce Kraeuter Named to Evaluate Safety of Nation’s Water Supply

Artesian Resources Corporation recently announced that Bruce Kraeuter, senior vice president of planning and engineering, was appointed to the U.S. Department of Homeland Security’s Water Sector Coordinating Council (WSCC), one of 10 sector councils that address the safety of the nation’s critical infrastructure.

The WSCC is made up of the most capable experts in water security, quality, management, engineering, operations, and maintenance disciplines. The Council was established in September 2004 by the federal Homeland Security Act to serve as a policy, strategy and coordination mechanism, and to recommend action to reduce and eliminate significant homeland security vulnerabilities to the water sector through interactions with the federal government and other critical infrastructure sectors.

Kraeuter was asked to serve on the WSCC by the Water Research Foundation (WRF) -- where he serves on the board of trustees -- one of the several water and wastewater umbrella organizations that have a seat on the Council. He will be one of only two WRF members with the ability to vote.

“I am extremely honored to have the opportunity to serve on the Water Sector Coordinating Council,” Kraeuter said. “Actively participating in the improvement of the security of the water sector that provides clean and safe water as an integral part of daily life is very important to me, and I feel that I have a great deal to contribute to this group.”

Kraeuter has been an active member of the Delaware natural resources community since he began his career in 1972 as a resources engineer with the Delaware Department of Natural Resources and Environmental Control (DNREC). He joined Artesian in July 1989 as an engineer, and in 2007 was promoted to senior vice president of planning and engineering. Kraeuter holds a B.S. in Engineering from Stevens Institute of Technology, and a M.S. in Chemical Engineering from the University of Kentucky.


Severn Trent Services Expands Line of Inorganic Treatment Products

Severn Trent Services has announced the expansion of its line of inorganic treatment products to now include five highly effective drinking water treatment solutions for the removal of arsenic, iron, manganese, nitrate, fluoride, and for pH adjustment.

“In designing our expanded range of inorganic products, we are building on our process experience and expertise with the SORB technology, the most successful and widely used arsenic-adsorption system in the world," said Tom Mills, Severn Trent Services’ vice president of marketing and business development, "Our full line of treatment solutions reflects our strong commitment to product innovation, and to protecting public health by reducing inorganic contaminants in drinking water.”

Severn Trent Services’ expanded inorganic product line now includes:

SORB 33® arsenic removal system featuring Bayoxide® E33 media – The SORB 33 process has been commercially proven to effectively and economically meet arsenic levels of less than 10 ppb across a wide range of water treatment applications. The Bayoxide media offers the lowest capital cost among arsenic treatment media and consistent performance while providing ease of operation and maintenance.

SORB 09™ fluoride removal system – The SORB 09 process features a small footprint and enhanced design and automation for improved operation efficiencies compared to conventional activated alumina adsorption systems. The system is a regenerative process that utilizes a weak caustic soda solution to remove fluoride from a solid activated alumina surface, extending the treatment life of the media.

SORB 07™ nitrate removal system – The SORB 07 system is an ion exchange process that features a small footprint and brine reduction compared to conventional ion exchange systems. The system typically includes at least two exchange vessels in parallel operation. Treatment bypass and blending are included in the design to minimize operating costs. Coupled with process monitoring and controls, the resin bed’s ion exchange capacity is greater than that of conventional processes.

Omni-SORB™ iron / manganese removal system – The Omni-SORB system is a cost-effective solution that reduces operational and maintenance expenses. The OmniFor SORB granular filter media is an engineered product using refined manganese that has high catalytic activity for oxidation and adsorption of iron and manganese. These catalytic properties allow the media to be efficiently used without the addition of potassium permanganate, a strong oxidant required for iron and manganese removal with greensand and other media.

TETRApHix® CO2 addition system – The TETRApHix system is an ideal solution for use in drinking water applications requiring the control of pH. The system offers increased gas efficiency, low maintenance and a smaller footprint compared to conventional carbon dioxide pH adjustment systems. The system is easily integrated into existing systems and controls, resulting in a simple and economical installation in new, existing or retrofitted water treatment facilities.


California American Water Teams With State Assemblyman Mike Eng for “Operation Gobble”

On Wednesday, Nov. 17, California State Assemblyman Mike Eng and representatives from California American Water will distribute over 100 turkeys to local nonprofits at the Our Savior Center, located at 4316 North Peck Road, El Monte, CA, as part of the 20th annual “Operation Gobble” program.

Operation Gobble is a joint philanthropic venture between California water companies and local state legislators that is set to deliver an estimated 30,000 turkeys to at-risk families throughout the state this Thanksgiving holiday. Since 1990, the program has paired the resources of the private and public sectors to benefit those in need. Participating investor-owned water companies, such as California American Water, provide turkeys and delivery services in partnership with local elected officials who offer expertise in directing the donations to community food banks, churches and other non-profit organizations.

"This annual program raises awareness of the issue of hunger in California while helping those who need it most," said Eng. "This year more than ever, it is important we all reach out to others in the community to ensure that every Californian doesn't go without this season of Thanksgiving."

According to the latest hunger study by the UCLA Center for Health Policy Research, 2.9 million Californians lack sufficient resources to feed themselves on a regular basis. Many of these residents are low-income families that will not be able to afford a Thanksgiving meal.


Long Island American Water Recognizes Student Art Contest Winners

Long Island American Water recently presented awards to nine fifth-grade students from three local elementary schools for their winning entries in the company’s Be Water Wise! Art Contest.

The winning entries were selected from nearly 150 projects submitted. Long Island American Water President Bill Varley presented gift cards to the winners, and all participants received certificates of recognition and Be Water Wise! Champion t-shirts.

The winners are:
Our Lady of Lourdes, Malverne, N.Y.: Grace Mary Dwyer and Emily Macaluso (tie), First Place; Ryan Barrett, Second Place; Courtney Ferguson, Third Place.

Rhame Avenue Elementary School, East Rockaway, N.Y.: Skylar Mastorson, First Place; Joanna Ambrosio, Third Place.

Lenox Elementary School, Baldwin, N.Y.: Antoinette Narchet, First Place; Ralph Gutierrez, Second Place; Grace Chen, Third Place.

Long Island American Water sponsored the Be Water Wise! Art Contest to help educate elementary school students in its service areas about the importance of water conservation.



Kentucky American Water Treatment Plant Earns Recognition for Optimal Performance

Kentucky American Water’s water treatment plant in Owenton, Ky., which the company purchased in 2005, has received the U.S. EPA's Area-Wide Optimization Program (AWOP) award for 2009 from the Kentucky Energy and Environment Cabinet (EEC). This distinction recognizes facilities that reduce the amount of turbidity (or cloudiness) in the water to levels well below what is required by state and federal regulations. Because bacteria and viruses can attach themselves to dirt -- the primary source of turbidity in water—the removal of particles is a critical component of protecting consumers from waterborne diseases.

When the company purchased the assets of the City of Owenton’s water and wastewater system in September 2005, the water treatment plant was experiencing a number of challenges with the quality of water produced and distributed to the community for use. Kentucky American Water quickly took action to meet customers’ needs for improved water service in Owenton and other areas served by the plant by applying its expertise to adjust the facility’s water treatment processes, enhance microbial testing practices and water quality sampling efforts, and make adjustments to the sources of water used.

As a result of these adjustments, today customers served by the plant no longer receive notification that there are unsafe levels of contaminants present in their drinking water, and they also have experienced a considerable reduction in the number of times they experience discolored water. The water treatment plant is now recognized by the EPA and the Kentucky EEC as completely optimized for turbidity and microbial removal.

Kentucky American Water owns and operates a second water treatment facility in Owen County near the community of Monterey. Construction on that facility was completed this fall and it was put into service on Sept. 20, 2010.