Pennichuck profits rise with temps
MERRIMACK – Pennichuck Corp. saw its profits rise about 25 percent over last year to almost $1 million in the second quarter because of a rate increase last summer for customers of Pennichuck Water Works and increased water use because of hot and dry weather.
In August 2009, the New Hampshire Public Utilities Commission approved a rate increase for Pennichuck Water Works that’s expected to bring in an extra $4.7 million per year. State regulators approved the hike to help Pennichuck recoup the cost of upgrades to its water-treatment plant in Merrimack.
Pennichuck is asking state regulators to approve another rate increase of about 16 percent. A portion of that increase would go toward legal fees the utility has spent fighting the city of Nashua’s takeover attempts.
Pennichuck Corp. also owns two smaller water-utility companies in New Hampshire, a water-service management company and a real-estate development firm.
The city tried for six years to seize Pennichuck by eminent domain before getting approval from the PUC in 2008. But the $243 million price set by the PUC was more than the city wanted to pay, so the takeover never happened. The city and Pennichuck are now trying to negotiate a private sale.
Pennichuck has said it hopes to recoup $5.4 million in eminent domain legal costs over a period of 10 years, and that this year’s rate increase, if approved, would cover the first installment, about $536,000.
A 2005 PUC order gave Pennichuck the go-ahead to seek a rate increase to cover legal fees after the eminent domain case was resolved.
In the second quarter of this year, Pennichuck spent $134,000 on eminent-domain-related expenses. That’s about double what the company spent in the same period last year.
Total revenues were $9.1 million, up from $8.5 million in the second quarter last year. The increase in revenues was partially offset by higher operating expenses and increased income taxes, totaling more than $550,000.
For the first half of 2010, Pennichuck Corp. profits totaled $1.1 million on revenues of $16.5 million, compared with $695,000 in profits on $15.5 million in revenues in the same period last year.
Eminent domain costs in the first six months of the year were $233,000.
Ashley Smith can be reached at 594-6446 or email@example.com.