City officials warn: No rate dip soon
LITCHFIELD – Litchfield residents and other customers of Nashua’s new water service won’t see their utility rates go down next year or the year after, city officials warned Monday. But their children will see the savings years from now, and they’ll have their parents to thank.
Nashua officials, who have a deal in place to acquire the Pennichuck Corp. water company, don’t foresee any great rate increases in the immediate future once Nashua takes control of the water company, likely next year. But the real cost savings stemming from the $198 million deal won’t be felt, either, until the debt payments come off the books 30 years from now, said John Patenaude, the city’s transaction executive.
The company, which covers more than 33,000 users across the state, serves about 1,785 of Litchfield’s 3,100 water customers.
“Once it’s paid off, the rates will go down because there’s no longer debt supporting it,” Patenaude told the half-dozen residents who gathered Monday at the Litchfield Board of Selectmen’s meeting.
“Basically, what you’re saying as far as the rate payers, we’re looking at zero relief until years down the road,” resident Robert McCulley countered. “In fact, most of us probably won’t be around by (then).”
In the meantime, city officials governing the utility company plan to restrict any rate increases to inflation, limited capital costs and interest payments, they said. Unlike the publicly traded Pennichuck Corp., the city-owned service will have no obligation to benefit its shareholders – only its users, officials said.
Beyond Nashua, the company and its subsidiaries – Pennichuck East, Pittsfield Aqueduct and two others – serve customers in Amherst, Bedford, Hollis, Litchfield and Merrimack, among other towns.
“The goal was to get it in the public’s ownership in southern New Hampshire to protect the residents of southern New Hampshire,” said Ray Peeples, Litchfield’s representative to the Merrimack Valley Regional Water District. “Right now, although this isn’t the final end point, it’s a step in the right direction.”
With a deal in place, the Nashua Board of Aldermen, the state Department of Public Utilities and Pennichuck shareholders still need to approve the sale for it to go through, Patenaude, the city’s transaction executive, told those at the meeting.
Once those votes are in place, city officials will have to form the utility’s board of directors.
The board, to govern the utility, will be made up of seven to 13 members, Patenaude said. At least five members will be from Nashua, while the rest will come from the surrounding towns.
“That means that while we don’t have direct representation … you guys could raise our rates without us having any more input,” Litchfield Selectman George Lambert asked the Nashua officials. “What was incorporated in your plan to protect the (town) of Litchfield to make sure we don’t bear an unnecessary burden?”
The subsidiary companies, including Pennichuck East, which serves Litchfield, will remain separate entities with governing boards of their own.
But Patenaude assured those at the meeting that Pennichuck’s subsidiary companies will remain separate entities with governing boards of their own. City officials have no plans to sell off the subsidiaries, and the separate boards can include more representation from the surrounding towns to better keep rates down, Patenaude said.
“It’s not our intention to increase rates ... for another year at least or two years. But it depends on the operating costs of the businesses,” he said. “We can’t make any long-term promises.”
City officials plan to present details of the acquisition later this week in Merrimack.
Jake Berry can be reached at 594-6402 or email@example.com.