PAWC acquiring East Dunkard Water Authority for $5 million
Pennsylvania American Water Co. is purchasing the troubled East Dunkard Water Authority and its assets for $5 million as part of an acquisition agreement approved last month.
PAWC revealed the financial figures Monday nearly a month after East Dunkard’s board voted unanimously to enter into an “asset purchase agreement” for the system that delivers water to 1,600 customers in southeastern Greene County.
The company said in a press release that it had been negotiating with the water authority for nine months before coming to an agreement, which the board approved during a June 29 special meeting.
In addition to the purchase price for the authority’s assets, PAWC President Justin Ladner said the company is planning to invest an additional $17 million to make upgrades to the system that will “significantly improve the water treatment plant and overall system reliability” for customers.
“We are committing the technical expertise and resources needed to satisfy the terms of the consent order and improve service for customers,” Ladner said.
Additional details about the purchase agreement and contract were not released. The Observer-Reporter and Herald-Standard newspapers filed an open records request with the authority Tuesday asking for a copy of the agreement.
It was not clear what the East Dunkard Water Authority would do with the proceeds from the sale, and neither the board’s solicitor, Lane Turturice, nor the office staff could be reached for comment Tuesday afternoon.
The state Public Utility Commission still must approve the agreement, which could take several more months to be finalized. PAWC said the company will keep the authority’s current rates as part of the agreement, and any future rate changes would have to be reviewed and approved by the PUC. The transaction is expected to be completed sometime next year, according to the water company.
PAWC may have to assume responsibility for a $225,000 civil penalty that is pending against East Dunkard for servicing several neighboring communities in recent years without proper approval. The PUC’s five-person board is currently reviewing the civil penalty that was part of a settlement between the water authority and the state regulatory agency’s investigative division.
The water company noted in its press release that the authority has been plagued with problems in recent years, including being under a consent order from the state Department of Environmental Protection since 2020. There have also been several boil water advisories for customers and dozens of violation notices from the DEP due to water quality and reliability issues.
East Dunkard Water Board Chairman Jerry Dorsey said the sale to PAWC is needed because the authority would not be able to make the needed upgrades to the treatment plant and water pipelines.
“The sale of our water system to Pennsylvania American Water will unburden the authority of having to correct deficiencies in our system that we simply couldn’t afford,” he said in a written statement. “This transaction will allow Pennsylvania American Water to work with the DEP to efficiently address needed improvements and make significant capital investments in the system. Undoubtedly, these measures will ensure that our customers receive the high-quality product and service they rightfully deserve.”
East Dunkard currently services customers in Dunkard and Greene townships, along with portions of Cumberland, Monongahela, Perry and Whiteley townships.