Main Line's Aqua America Buys Pittsburgh Utility Co For $4.28B

Aqua America, which calls the Main Line home, has acquired utility provider in the Pittsburgh area for more than $4 billion.

Peoples Gas. Co., which has made overtures about supplying water to Pittsburgh and other southwestern Pennsylvania communities, has been sold to Bryn Mawr-based Aqua America for $4.28 billion. The consolidated company will serve an estimated five million customers.

Aqua Chief Executive Christopher Franklin will run the company - which will include Peoples Gas Co., Peoples Natural Gas Co. and Delta Natural Gas - from its current headquarters. Peoples CEO Morgan O'Brien will continue to run the natural-gas company, which will continue to be based in Pittsburgh.
Aqua said in a news release that the transaction "is not expected to have any impact on rates."

It's unclear how the deal might impact Peoples' desire to become a water supplier in the region. In July, O'Brien announced the establishment of a new entity, Peoples Water, to build a public-private partnership with local governments and a new water treatment facility.

O'Brien provided no details as to the project's cost, how the facility would be financed and whether any local governments were on board with the plan. Peoples said, however, that no taxpayer dollars would be used for the new facility.

The Pittsburgh Water & Sewer Authority currently supplies the city's drinking water. The authority has exceeded a federal lead content threshold for drinking water for the past two years and the Pennsylvania Department of Environmental Protection has ordered it to replace a minimum of 7 percent of its lead lines each year.

Additionally, the authority has been plagued by numerous billing errors, numerous water main breaks and mounting debt. The agency has been operating under the oversight of the state Public Utility Commission.

Story by Eric Heyl

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