Essential Utilities’ Aqua Texas Subsidiary Completes First Acquisition Under New Texas Fair Market Value Law
August 03 2021 - 8:00AM
Business Wire
Essential Utilities Inc. (NYSE: WTRG) today announced that its
Aqua Texas water utility has acquired the water treatment and
distribution system in The Commons of Lake Houston community in
Huffman, Texas yesterday. The Commons’ system serves approximately
1,000 homes in the development.
The transaction is the first of which Aqua Texas was able to use
a new Texas law that allows regulated water companies to pay a fair
market value for the purchase of water and wastewater systems.
Prior to the new law, enacted in 2019, a system’s value previously
was determined by its depreciated original cost, which generally
did not reflect a reasonable market value for those assets. The new
FMV law applies to all water and wastewater utilities including
those owned and operated by private investors and municipal
governments.
When the agreement of sale was reached several months ago,
Essential Chairman and CEO Christopher Franklin said The Commons
agreement illustrated the benefits of the new fair market value
law. “The Texas fair market value law offers a compelling solution
to municipalities, developers and other utility owners who must
meet ever-increasing health and environmental standards and the
costs of operating and maintaining their systems,” said Franklin.
“Aqua can benefit other communities like The Commons by leveraging
our expertise in compliance, large-scale purchasing power and other
efficiencies that can be realized with a larger, regional
operation.”
“My team and I are proud to welcome residents of The Commons as
our new customers,” said Aqua Texas President Bob Laughman.
“Although this is not a municipal acquisition, it is worth noting
that municipalities in other states with FMV legislation have sold
their utility systems to Aqua and used the proceeds to offset tax
increases, build new municipal facilities, and fund new
infrastructure projects among other things. In other cases, the
sale has enabled municipalities to avoid the necessary cost to
bring their systems into environmental regulatory compliance by
shifting that responsibility to Aqua, as we are experts in
compliance.”
The Commons is the first acquisition completed by Essential’s
Aqua companies in 2021. The company currently has seven additional
signed purchase agreements for water and wastewater systems which
have a total purchase price of $458.5 million and represent
approximately 233,000 equivalent dwelling units.
Aqua Texas serves about 200,000 people in 53 counties across
Texas. Visit AquaAmerica.com for more information or follow
@MyAquaAmerica on Facebook and Twitter.
About Essential
Essential is one of the largest publicly traded water,
wastewater and natural gas providers in the U.S., serving
approximately 5 million people across 10 states under the Aqua and
Peoples brands. Essential is committed to excellence in proactive
infrastructure investment, regulatory expertise, operational
efficiency and environmental stewardship. The company recognizes
the importance water and natural gas play in everyday life and is
proud to deliver safe, reliable services that contribute to the
quality of life in the communities it serves. For more information,
visit http://www.essential.co.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including. There are important factors that could cause actual
results to differ materially from those expressed or implied by the
forward-looking statements including: general economic business
conditions; the successful integration of the customers and the
facility; and other factors discussed in our Annual Report on Form
10-K, which is on file with the Securities and Exchange Commission.
For more information regarding risks and uncertainties associated
with Essential Utilities’ business, please refer to Essential
Utilities’ annual, quarterly and other SEC filings. Essential
Utilities is not under any obligation — and expressly disclaims any
such obligation — to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
WTRGF
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version on businesswire.com: https://www.businesswire.com/news/home/20210803005408/en/
Brian Dingerdissen Investor Relations O: 610.645.1191
BJDingerdissen@Essential.co
Donna Alston Communications and Marketing O: 610.645.1095
Media@essential.co
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