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Pennichuck Water Works

Mayor Donnalee Lozeau announced Friday Nov.12th, 2010 that the city has signed a definitive merger agreement to acquire all the outstanding shares of Pennichuck Corporation (Nasdaq: PNNW) for a price of $29.00 per share, or approximately $138 million in cash. Under the proposed acquisition, the city will acquire control of all of the company assets, liabilities and businesses, including the land comprising the watershed of the Pennichuck Brook and the three regulated water utilities owned by the company.

Bond Rating News on Pennichuck Sale
Read the Fitch Press Release for Nashua GO Bonds and the Nashua NH Moodys report.

View the presentation from the January 6, 2011 Special Meeting of the Board of Alderman, Public Hearing, R-10-82

View the presentation from the January 6, 2011 Pennichuck Water Special Committee, R-10-81

View the presentation from the November 15th Public Information Session


Legal Files

Link to Current Acquisition Filings at the PUC

Legal 2011

Legal 2010 - including Pennichuck Agreement

Legal 2009

Legal 2008

Legal 2007

Legal 2006

Legal 2004

Legal 2005

Legal 2002

History of the City of Nashua - Pennichuck Agreement

The City of Nashua understands that drinking water is of critical importance to the long-term sustainability of the City and the region. The availability and associated cost of plentiful, clean drinking water impacts the desirability of businesses and residents to locate here and grow here.

Most of Nashua’s drinking water is provided by Pennichuck Water Works, and has been since the company’s inception in 1852. Throughout the years, and still today, many of the people who operate Pennichuck and make decisions about the future of our drinking water are neighbors and friends. The citizens of Nashua think of Pennichuck as a local business.

Since the 1970s and the Clean Water Act, our nation has become increasingly aware of the fragility of drinking water, and how our actions influence its quality and quantity. In the early 1980s, Pennichuck reorganized, and with that reorganization came the approval by the Public Utilities Commission to dispose of approximately 1,100 acres of watershed land and build a water treatment plant. Since that time, a significant amount of the 1,100 acres has been developed.

In the 1990s the citizens and policy leaders of the City became more and more concerned with Pennichuck Corporation’s need to “balance between watershed protection and economic growth,” as expressed by then-CEO Maurice Arel. In response to those concerns, the City of Nashua passed the Water Supply Protection District ordinance to increase protection of the watershed. The City then purchased 250 acres plus 41 acres of conservation easement from Pennichuck Corporation to protect the land from being developed by Pennichuck Corporation.

In April 2002 Pennichuck Corporation announced its agreement to merge with Philadelphia Suburban, the second largest water company in our nation, located in Bryn Mawr, Pennsylvania. As a result, the City filed as interveners with the Public Utilities Commission (PUC), contracted consultants to provide information to ensure knowledgeable decision-making, and engaged in negotiations with other communities regarding the possibility of a regional water district.

On January 14, 2003 a special election was held and the citizens of Nashua voted by 77% to support the City’s pursuit of public ownership of their drinking water system. Subsequent to that vote, Philadelphia Suburban withdrew its offer.

In the nearly seven years since that vote, City leaders have pursued both taking the utility by eminent domain and negotiating a private buyout of the company’s stock.

The following is a timeline of major events since January, 2003:

November 2003 - The City offers to buy Pennichuck for $121 million. Pennichuck’s board of directors unanimously rejects this offer one month later.

March 2004 – City officials file a petition with the PUC to take Pennichuck Corporation by eminent domain. Pennichuck Corporation owns five related companies, including Pennichuck Water Works, Inc., The Southwood Corporation, Pennichuck Water Service Corp., Pennichuck East Utility, and Pittsfield Aqueduct Co.

July 2004 – Hearings begin at PUC regarding the City’s proposed takeover.

January 2007 - Hearings begin at the PUC but are suspended when both sides ask for 120 days to work out a negotiated settlement. Shortly afterwards, the City terminates the talks saying it cannot reach a settlement with the utility. The case returns to the PUC.

July 2008 - The New Hampshire Public Utilities Commission rules that it is in the public interest for the City of Nashua to take the assets of Pennichuck Water Works, Inc. The Commission sets the value of that taking at $203 million, and also requires a mitigation fund of $43 million. In a dissenting opinion Commissioner Clifton Below reasons that the proper value of the taking should cost no more than $151 million. Both sides ask the Commission to reconsider its ruling. The City maintains the price is too high, while Pennichuck claims the taking is not buyout is illegal and cited legal errors.

March 2009 – The PUC denies both parties’ requests for reconsideration.

April 2009 – The City and Pennichuck both file notices of appeal with the New Hampshire Supreme Court. Nashua appeals the value set by the PUC as too high.

Fall of 2009 – The City of Nashua and Pennichuck file legal briefs concerning the issues on appeal with the New Hampshire Supreme Court.

January 2010 - The supreme court is expected to schedule oral arguments early in the New Year.

November 2010 - Mayor Donnalee Lozeau announced that the city has signed a definitive merger agreement to acquire all the outstanding shares of Pennichuck Corporation (Nasdaq: PNNW) for a price of $29.00 per share, or approximately $138 million in cash. Under the proposed acquisition, the city will acquire control of all of the company assets, liabilities and businesses, including the land comprising the watershed of the Pennichuck Brook and the three regulated water utilities owned by the company.

Proposed Resolutions:

Pennichuck Related:

Important Notice regarding Excel version of Pennichuck Model

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