An agreement announced Monday between Aqua America, Inc. and American Water Works Company, Inc. could have a major impact on water service in the Massapequa area.
The agreement announced by the private water utilities would involve Aqua America selling all its regulated operations in New York to American Water Works for around $71 million. The transaction would also involve Aqua America purchasing all of American Water’s regulated operations in Ohio for approximately $120 million. Both transactions are subject to certain regulatory approvals and the companies are expecting the acquisitions to close during the first quarter of 2012.
If the transactions are approved, it would mean the end of Aqua America’s subsidiary, Aqua New York, which serves more than 152,000 residents in the New York City metropolitan area including the communities of Wantagh, Seaford, Merrick, Bellmore, Levittown, Massapequa Park, East Massapequa and parts of Glen Cove.
The Southeastern Nassau County Water Authority has held recent meetings discussing a because of high rates. Aqua America posted $104 million net income in 2009.
SENWA Chairman Richard Ronan could not immediately be reached for comment on the transaction.
Nassau County Legis. David Deneneberg, D-Merrick, who has been fighting for a public takeover of Aqua New York for the last four years, said Long Island American Water would still not be a good match for local residents.
“I believe that private companies having a monopoly to provide a necessity is never a good match,” said Denenberg. “I don’t believe they are going to reduce rates and anything that makes a public takeover more expensive should give everyone concern.”
Aqua America spokeswoman Mia Angiolillo said the deal announced Monday will not impact service for its Nassau County customers "until the transaction closes."
Long Island American Water, American Water’s New York subsidiary, would become the state’s largest investor-owned water utility if the transaction with Aqua receive regulatory approval. Long Island American Water services over 200,000 people, in 31 communities including Lynbrook, Malverne and the Five Towns area. Last month, Lynbrook-based Long Island American Water a 19.5 percent rate hike on its customers citing costs needed to invest in infrastructure and water quality requirements.
"We have a strong track record of making needed investments in our pipes and plants to ensure reliable service and we are pleased to bring that level of service to many more people who live in New York," said Bill Varley, president of Long Island American Water, in a statement.