PITTSBURGH (KDKA) — Peoples, owner of Peoples Natural Gas, is being bought by Philadelphia-based water utility named Aqua America, the company announced Tuesday.
In a statement, Aqua CEO Christopher Franklin said, “The acquisition of Peoples is a great strategic fit and aligns directly with our growth strategy and core competencies of building and rehabilitating infrastructure, timely regulatory recovery, and operational excellence.”
The all-cash transaction is valued at $4.275 billion and will not adversely affect customers or current employees, Aqua says.
The deal does require the approval of the Public Utility Commission.
“The Commission is driven by the public utility code, and that requires that the utilities that are coming to us with this request demonstrate that the transaction is ‘necessary or proper for the service, accommodation, convenience, or safety of the public.'” Says Nils Hagen-Frederiksen, spokesperson for the PUC. “And that’s the guiding star for the PUC in considering any of these transactions.”
It is unusual for a large water company to take over a large natural gas company, but given Peoples Gas interest in the Pittsburgh Water & Sewer Authority (PWSA), many think that’s behind this deal.
Peoples has reached out to the PWSA, offering to rebuild infrastructure and water treatment facilities.
But that raises suspicions about this Aqua America deal, says former city council president Doug Shields with Food and Water Watch, a national non-profit environmental group.
“If the end game is to take over the Pittsburgh Water & Sewer Authority, I think there is a really good reason to stop this deal,” says Shields.
Pittsburgh Mayor Bill Peduto is non-committal about the deal’s impact on the PWSA.
“There will be an opportunity to show to the people of Pittsburgh what the best option is,” says Peduto. “We’re not going to assume it. We’re going to have a process that the public will be able to see it.”