Attempt To Buy Aquarion Is Misguided
By Larry L. Bingaman
Hampton Union, Friday, March 10, 2006
[The following article is courtesy of the Hampton Union and Seacoast Online.]
It is unfortunate that Henry Fuller chose not to meet with Aquarion Water Company to get his facts before announcing in Hampton Union (March 7, 2006) a misguided attempt to buy Aquarion Water Company.
Aquarion Water Company, parent of the New Hampshire water company operations, was founded in Bridgeport, Conn., in 1857. Aquarion is one of the 10 largest investor-owned water companies in the United States and the largest privately owned water utility in New England. Today it provides quality water service to 211,000 homes and businesses, or approximately 677,000 people, in 53 communities in Connecticut, New York, Massachusetts and New Hampshire.
Since acquiring the Hampton, North Hampton and Rye operations in 2002, Aquarion has invested more than $5 million to increase water supplies, lift a building moratorium and improve water quality and service. As part of its commitment to provide quality water to its close to 9,000 New Hampshire customers, Aquarion will invest an additional $2 million to further improve the water system in the next year.
Aquarion has a long history of successfully running water systems, ensuring the water meets or is better than state and federal quality standards and making prudent investments to improve service.
Contrary to Mr. Fuller's remarks, Aquarion Water Company is not for sale. Rather, it is being acquired by Macquarie Bank, a well-respected organization and an international leader in infrastructure investment. Many pension and mutual funds have invested in Macguarie's close to $9 billion in U.S. assets. With 17 locations in 11 U.S. cities, Macquarie has a particular depth of experience in the regulated utility arena. Local management will remain with Aquarion Water Company of New Hampshire and all local, state and federal regulations will be met.
Aquarion's water rates are set by the N.H. Public Utility Commission. The commission, an independent body appointed by the governor, determines which investments and operating expenses are included in the rates. When a town or water district manage a system, all investments and expenses of the system must be recovered, whether prudent or not, and are captured in rates. Since the investments and operating expenses become part of a town's budget, they are subject to the same political debates as other investments and what the town can afford rather than on the need to invest to improve the system.
Aquarion Water Company charges the towns of Hampton, North Hampton and Rye a hydrant fee of about $1,169 per hydrant. In North Hampton, this amounts to $171,859 per year. The fire service charge enables the availability of thousands of gallons of water at a moment's notice to fight fires at no additional charge to the town. This fee is partially offset by the $94,805 in annual property taxes Aquarion pays to the town. A difference of $77,054. If the town of North Hampton were to take over Aquarion's New Hampshire operations, the capital investment funds would become part of the town finance budget -- one that is struggling to meet other capital needs today. No matter how you add it up, taxpayers may be on the hook for millions and millions of dollars to save $77,054 a year.
If Mr. Fuller were successful, and the takeover of Aquarion ultimately proceeds, North Hampton residents would be signing up to take on tens of millions of dollars of additional debt to take over the water system and add millions of dollars to the town budget to operate and invest in the system.
Aquarion is committed to providing the highest quality water at the most cost effective price.
Rather than spending money to hold a special town meeting, we would strongly encourage Mr. Fuller to hold a Water Commission meeting so all the facts about water delivery in his town can be made public.
Larry L. Bingaman is senior vice president. Operations, Massachusetts and New Hampshire, for Aquarion Water Company.