American Water Works Subsidiary Gets Pennsylvania PUC Approval To Buy Wastewater System For $230M

American Water Works Co Inc's AWK subsidiary, Pennsylvania American Water, attained approval from the Pennsylvania Public Utility Commission (PUC) to acquire the Butler Area Sewer Authority (BASA) wastewater system for $230 million.

The deal will significantly boost AWK's assistance programs to address affordability further. 

As part of the agreement, Pennsylvania American Water will nearly double its shareholder contribution to the hardship grant program, increasing the fund by $3.5 million over five years. 

The agreement also enhanced the program's income eligibility criteria to 250% from 200% of Federal Poverty Income Guidelines, resulting in an estimated 52,900 additional water and 8,800 more wastewater customers receiving bill assistance grants. 

This approval follows a settlement deal between the Office of Consumer Advocate, Office of Small Business Advocate, and Bureau of Investigation and Enforcement of the PUC done in August.

Also Read: American Water Works Subsidiary Pennsylvania American Water Strikes $8M Deal For Audubon

Post attaint ownership, Pennsylvania American Water plans to make necessary treatment and collection system upgrades to boost the wastewater system, which is expected to be over $75 million. 

The acquisition is expected to close by the end of 2023.

Also Read: American Water Works Gains Favor: Analyst Highlights Strong Financial Footing, Eyes 8% CAGR

This week, Pennsylvania American Water filed a rate adjustment request today with the Pennsylvania PUC reflecting $1 billion in water and wastewater system investments through mid-2025 to continue offering safe and reliable service.

As of September 30, 2023, AWK had cash and cash equivalents of $661 million.

Price Action: AWK shares are trading lower by 0.19% at $124.04 on the last check Friday.