American Water Works Co. Inc. announced Thursday it entered into an agreement to sell its New York operations to Liberty Utilities, the regulated utility business of parent company Algonquin Power & Utilities Corp., for approximately $608 million in cash.
Susan Story, president and chief executive officer of American Water, said the company ensures that no jobs will be lost as a result of the transaction with Liberty Utilities. Under the terms of the deal, Liberty Utilities committed to maintain existing employment terms for two years following the closing, including keeping salaries and benefits comparable for the New York American Water employees.
“This was a very difficult decision for American Water, as we have had the privilege of serving customers and communities in New York for more than 130 years,” said Story. “After a careful and comprehensive analysis, we believe it is in the best interest of our customers in New York to sell to Liberty Utilities, which already has water utility operations and will have a larger presence in New York once the transaction closes. We are committed to working together to ensure that the transition is unnoticeable to our customers and that safe and reliable water service continues throughout the transition and beyond.”
Liberty will work closely with New York American Water and the New York Public Service Commission to ensure a smooth transition. Under Liberty Utilities’ commitment to a local, responsive and caring operating model, local management and operations teams will be maintained and empowered to continue to deliver safe and reliable service that customers expect.
Liberty Utilities said that customers should not expect any impact on water rates as a result of the acquisition.
The company stated it is also committed to continuing to invest in the water system to improve water quality, customer education on conservation and community outreach. They will also work with regulatory and other state officials as well as with New York American Water during the transition to address the burden of local taxes on New York American Water’s customers, which can account for more than half of their monthly bills.
American Water and Liberty Utilities anticipate the sale will close in the latter half of 2020. The completion of the transaction is subject to the satisfaction or waiver of various conditions including regulatory approval by the New York Public Service Commission and the receipt of other various customary closing consents and approvals.
Keystone Clearwater Solutions sale
Meanwhile, American Water also announced an agreement to sell its Keystone Clearwater Solutions operations to SC Water LLC, a Pennsylvania-based natural gas and oil industry investment group.
The completion of this transaction is subject to the satisfaction of customary closing conditions. Both companies are committed to a seamless transition for Keystone’s employees and customers. American Water anticipates this sale will close before the end of 2019.