Pennsylvania American Water Acquires McKeesport Wastewater for $159 Million

Pennsylvania American Water, a subsidiary of American Water Works Company Inc., has acquired the wastewater assets of the Municipal Authority of the City of McKeesport, Pa., near Pittsburgh for a reported $159 million price tag, injecting roughly 22,000 more customers into the company’s customer base.

This marks another substantial acquisition deal made by Pennsylvania American following a recent $195 million purchase of Scranton Sewer Authority’s wastewater system, along with several other pickups statewide, and they now own wastewater systems in 12 counties throughout the state.

Following McKeesport’s initial request for bids in June 2016, this deal was originally announced in September 2016 and has only now been confirmed by the U.S. Environmental Protection Agency, the state Department of Environmental Protection, the state Public Utility Commission and the Allegheny County Healthy Department after a lengthy review process.

The deal marks significant growth for Pennsylvania American while also potentially saving the McKeesport municipality from a dubious financial situation.

“The crux of this transaction is bringing financial stability to the City of McKeesport and saving our taxpayers from Act 47 municipal bankruptcy,” said Mayor Michael Cherepko. “When we think about it, the privatization of local sewage services truly makes sense. The city isn’t involved in other utility businesses -- gas, electric, water -- and this final step in providing consistent, regulated utility services to our community.”

Another notable stipulation of the deal ensures Pennsylvania American will not raise wastewater rates for at least one year following the deal closing.

Beyond this, American Water Works intends to invest $8 billion to $8.6 billion in water U.S. water infrastructure over the next five years.