Pennichuck Corporation Announces Results of New Survey Regarding Proposed Eminent Domain Taking of Subsidiary's Assets
October 16 2008 - 9:44AM
Marketwired
Pennichuck Corporation (NASDAQ: PNNW) today announced the results
of a new survey conducted from September 25 - 28, 2008 by American
Research Group regarding the City of Nashua's proposed taking of
the operating assets of the Company's Pennichuck Water Works, Inc.
regulated utility subsidiary ("PWW") by eminent domain.
Nearly two-thirds of Nashua residents believe the City should
negotiate directly with Pennichuck to find a way other than eminent
domain to acquire control over the water system. In addition,
strong majorities want more information and another chance to vote
on the issue, should the City move forward with eminent domain.
"We are not surprised that most Nashuans think there is a better
way than eminent domain," said Pennichuck President and CEO Duane
Montopoli. "Nor are we surprised that people need more information.
Attempting to take a private business by eminent domain is a
complex issue with many serious ramifications for customers. We
believe the people of Nashua deserve to hear all of the facts and
have another opportunity to give input on this matter."
Montopoli said Pennichuck conducted the survey to obtain, "an
accurate and current view of how Nashuans feel about the eminent
domain issue. The last vote on this subject was five years ago, and
the ballot did not ask for approval to take the water system by
eminent domain. The situation has changed significantly since that
referendum."
In July 2008, the New Hampshire Public Utilities Commission
("NHPUC") ruled that Nashua could take the operating assets of PWW
by eminent domain for $243 million. $40 million of that amount
would be placed in a mitigation fund to protect the interests of
the customers of the Company's other two regulated utilities. Those
other two utilities would not be subject to the takeover. In
response to the NHPUC order, the Company and the City have filed
motions for rehearing before the NHPUC and the Company has
announced that, if necessary, it will consider an appeal to the New
Hampshire Supreme Court. If the City's right to take the utility
assets is ultimately upheld, its aldermanic board would then still
have to decide whether or not to proceed with the taking assuming
the City is able to finance the purchase.
The survey showed that 79% of respondents opposed the eminent
domain takeover when they learned about the $40 million mitigation
fund for the benefit of Pennichuck customers in other
municipalities.
Montopoli noted that there are many aspects of the eminent
domain dispute that Nashuans may not be fully informed about. In
fact, when asked, "Do you believe the public needs more information
about a takeover by eminent domain before the City of Nashua moves
forward in that regard?" 74% responded, "Yes, needs more
information." Sixty-three percent of those surveyed believe the
public deserves the right to vote before the City moves forward
with eminent domain.
Other significant survey findings include strong opposition
(78%) to having a foreign-owned company operate the water system
for Nashua, and strong opposition (71%) to the takeover upon
learning that customers could face a consequential rate hike of 40%
or more. Nearly three-quarters of those surveyed also opposed the
takeover when told that more than 30 current Pennichuck employees
could lose their jobs as a result.
The survey, which interviewed 400 randomly selected adults in
Nashua, showed that residents are evenly split (44%-42%) on the
general question of whether the City should own and operate its
drinking water system, but only 14% believe the City could do a
better job than Pennichuck in running the system.
Montopoli concluded, "It is very clear that residents oppose
Nashua's proposed eminent domain takeover when they learn about the
consequences. It is also clear that Nashuans want direct
negotiations between the City and Pennichuck, outside of eminent
domain, if any transaction is to take place. We remain open to such
discussions."
The full survey questionnaire and results are available at
www.pennichuck.com.
Pennichuck Corporation is a holding company involved principally
in the supply and distribution of potable water in New Hampshire
through its three regulated water utilities. Its non-regulated,
water-related activities include operations and maintenance
contracts with municipalities and private entities in New Hampshire
and Massachusetts. The Company's real estate operations are
involved in the ownership, management and commercialization of real
estate in southern New Hampshire.
Pennichuck Corporation's common stock trades on the Nasdaq
Global Market under the symbol "PNNW."
This news release may contain certain forward-looking statements
with respect to the financial condition, results of operations and
business of Pennichuck Corporation. Forward-looking statements are
based on current information and expectations available to
management at the time the statements are made, and are subject to
various factors, risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements. These factors include, but are not
limited to, the timing and results of a rehearing before the New
Hampshire Public Utilities Commission regarding its recent eminent
domain order (the "Eminent Domain Order") in favor of the City of
Nashua, New Hampshire; the timing and results of a possible appeal
to the New Hampshire Supreme Court regarding the Eminent Domain
Order; the impact of an eminent domain taking by Nashua on business
operations and net assets; legislation and/or regulation and
accounting factors affecting Pennichuck Corporation's financial
condition and results of operations; the availability and cost of
capital, including the impact on our borrowing costs of changes in
interest rates; and, the impact of weather. Investors are
encouraged to access Pennichuck Corporation's annual and quarterly
periodic reports filed with the Securities and Exchange Commission
for financial and business information regarding Pennichuck
Corporation, including a more detailed discussion of these and
other risks and uncertainties that could affect Pennichuck
Corporation's forward-looking statements. We undertake no
obligation to update or revise publicly any forward-looking
statement.
For More Information, Contact: Duane C. Montopoli President and
Chief Executive Officer Phone: 603-913-2300 Fax: 603-913-2305
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