Pennsylvania’s largest water and wastewater provider is looking to take over the sewer system serving Kane and Wetmore Township –– but the asking price remains in question.
Pennsylvania American Water and the Kane Borough Sewer Authority have 30 days –– around the end of the month –– to negotiate a price or the process ends, Kane Borough Sewer Authority Chairman Dave Peterson said.
“If we can agree on a price, we are still very interested in selling the sewer system,” Peterson told The Era Wednesday night.
The two entities signed a formal agreement subject to appraisals in November 2017, said Gary Lobaugh, spokesman for Pennsylvania American Water. Both sides are in the early stages of negotiations, Peterson said.
The valuation of the sewer system is placed at $22.2 million, a news outlet reported in late April, and is what the authority has offered for discussion. Pennsylvania American Water’s valuation was a little higher, Peterson said. Taking both figures and dividing by two to determine the average, the valuation came to about $23 million, Peterson said.
But, Lobaugh said, “Ultimately, the Public Utility Commission will determine the value of the system.”
The sale will be completed following a rigorous regulatory review and approval process by the U.S. Environmental Protection Agency, Pennsylvania Department of Environmental Protection and the Pennsylvania Public Utility Commission, Lobaugh said.
Throughout Pennsylvania, municipalities such as Kane Borough and Wetmore Township are looking for ways to tackle rising expenses related to providing government services combined with the effects of a declining population and tax bases, Lobaugh said.
“These challenges exist at a time when municipalities are saddled with the impacts of illegal drug activity, unfunded pension liabilities, needed street repairs, abandoned buildings, low employment and the difficult task of financing needed water and wastewater system improvements to comply with more stringent regulatory requirements, while keeping all essential services affordable,” Lobaugh said.
Pennsylvania American Water is the the commonwealth’s largest water and wastewater provider, Lobaugh said, adding that the company has an “established record of accomplishment with extensive experience in delivering large, complex water and wastewater capital improvement projects.”
The company also has access to resources, including professionals with expertise in various specialized areas of wastewater operations and workers have experience with similarly sized combined sewer systems like Kane, he said.
“Pennsylvania American Water and our subsidiaries have enjoyed a more than 100-year partnership in these communities and the proposed acquisition of the area’s wastewater treatment would be of great value to our customers, the municipalities, and the company,” Lobaugh said.
Pennsylvania American Water already owns the Kane water treatment plant, which delivers an average of 400,000 gallons of drinking water a day to about 5,000 people in Kane Borough and portions of Wetmore Township.
