Business Wire 14-Jan-2019 12:19 PM
Aqua America Inc. (NYSE:WTR) today said legislation signed into law this month by Ohio Gov. John Kasich will allow companies like Aqua to pay a fair market value for the purchase of water and wastewater systems, benefiting local governments, customers and the environment. Before these changes, system values were determined by their depreciated original cost, which generally did not reflect a reasonable market value for those assets and became a barrier to a sale. Ohio has become Aqua's sixth state to pass legislation providing the opportunity for municipal utilities to receive a fair market value for their systems.
"Municipal fair market value legislation in Ohio will allow Aqua to offer important solutions to municipalities challenged with meeting ever-increasing regulatory standards and the costs of replacing their aging infrastructure," said Chairman and CEO Christopher Franklin. "And as we've seen in our other fair market value states, proceeds from the sale of a water or wastewater system to a regulated utility can enable municipal leaders to pursue other important initiatives in their communities."
Aqua Ohio President Ed Kolodziej said this legislation will allow his team to play an even more active role in making essential infrastructure improvements to help provide communities with better compliance, service and environmental stewardship for generations to come. "Regulated utilities such as Aqua provide tangible value through our expertise, economies of scale and resulting efficiencies," he said. "We are already hearing from communities asking what this legislation could mean for them."
According to the American Society of Civil Engineers, Ohio's drinking water infrastructure needs are estimated at $12.2 billion, and its wastewater needs are estimated at more than $14.5 billion over the next 20 years. Kolodziej said municipal fair market value could be a lifeline to many communities that have no means to address their failing infrastructure without cutting funding to essential public services. In 2019, Aqua Ohio plans to invest $41.9 million to strengthen water and wastewater systems.
About Aqua America
Aqua America is the second-largest publicly traded water utility based in the U.S. and serves over 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia. Aqua America is listed on the New York Stock Exchange under the ticker symbol WTR. Visit AquaAmerica.com for more information or follow Aqua on Facebook at facebook.com/MyAquaAmerica and on Twitter at @MyAquaAmerica.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others: that the legislation will allow the Company to pay fair market value for water and wastewater assets benefiting local governments, customers and the environment and that the Company will be able to create value through its expertise, economies of scale, and deliver efficiencies. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions; the company's ability to leverage its compliance expertise, economies of scale, purchasing power, and operational experience; the company's ability to fund needed infrastructure; changes in regulations or regulatory treatment; availability and access to capital; the cost of capital; disruptions in the credit markets; and other factors discussed in our Annual Report on Form 10-K and our Quarterly Report on Form 10-Q, which are filed with the Securities and Exchange Commission. For more information regarding risks and uncertainties associated with Aqua America's business, please refer to Aqua America's annual, quarterly and other SEC filings. Aqua America 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.
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