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Monday, January 31, 2011

Citizen aims to gain voice over utility

NASHUA – Before voters elected Fred Teeboom to the Board of Aldermen in 2005, the taxpayer-activist was an intervenor in hearings before state regulators as the city sought to acquire Pennichuck Water Works through eminent domain.

When Teeboom served as an alderman-at-large from 2006 through 2009, he relinquished his intervenor status, instead participating in close-door strategy sessions about the takeover as a member of the city’s top governing board.

In 2010, Teeboom left office, and the city later that year cut a deal to acquire Pennichuck Corp. through a stock purchase, dropping its eminent domain case.

Now, it’s 2011, and it’s deja vu for Teeboom. He is again a private citizen, and once again he’s asking the state Public Utilities Commission to grant him intervenor status as the regulatory commission holds hearings on the proposed acquisition.

As an intervenor, Teeboom would be allowed to participate in the PUC hearings by submitting testimony and perhaps questioning witnesses.

Teeboom is the first person to seek intervenor status in the PUC examination of the acquisition, according to PUC officials.

However, it’s early in the process, they say.

Neither the city nor Pennichuck Corp. has yet filed required paperwork to the PUC, and thus no new docket for the case has been created, officials say.

So far, only a procedural hearing has been scheduled, for Feb. 24. Hearings on the merits of the acquisition would likely be scheduled for later in the spring.

The acquisition and purchase has been endorsed by the Board of Aldermen in a series of votes. It must now by approved by two-thirds of Pennichuck shareholders and by the PUC in a process that city officials say could take months.

In the eminent domain case, there were a number of intervenors besides Teeboom, including Barbara Pressly, who then was only a citizen, but now serves as an alderman-at-large.

Other intervenors included the Anheuser-Busch Cos., a customer of Pennichuck water at its Merrimack brewery, and several towns outside of Nashua that the utility served.

There likely will be at least several intervenors in the current case.

Though Teeboom opposed eminent domain, he supports the city acquiring Pennichuck through a stock purchase, he said.

“I still think the purchase is a good idea,” Teeboom said.

However, he has concerns about how the utility would be structured under city ownership and about financial models created by city consultants that show immediately water rates would be lower under city ownership, and quite a bit lower after the 30-year, up-to-$220-million bond to purchase the company is paid off.

Teeboom, a retired engineer who as an alderman couldn’t resist an opportunity to create his own charts and spreadsheets, which often ran contrary to financial information presented by the city or school department, said he’s crunched the numbers and arrived at a different conclusion.

Teeboom believes that water customers would pay higher rates initially under city ownership until the debt is paid down.

“The whole thing is contrived. ... it’s not creditable,” Teeboom said of the city’s financial model, posted on the city’s website, www.gonashua.com, and found by clicking on “Pennichuck Water Works” under the “New” banner on the right side of the screen.

City ownership of Pennichuck will be good for ratepayers because the company has been mismanaged under the current corporate ownership, Teeboom said.

“In 30 years from now, definitely, the rates will come down,” Teeboom said.

But the city and its consultants should paint a more accurate financial picture of what will happen immediately under city ownership, he said.

Teeboom said he is concerned that Pennichuck would be managed by an independent board of directors appointed by the mayor and approved by the Board of Aldermen. During Board of Aldermen discussions from 2007-09, the intent was to make Pennichuck Water Works a city department, Teeboom said.

“It was always going to be part of the city,” Teeboom said. “Why suddenly change it from a city department to a taxable corporation?”

Teeboom also said he’s puzzled why the current price is $29 a share, while a few years ago the price was discussed at $25 a share.

“What happened to the $4?” Teeboom said.

Patrick Meighan can be reached at 594-6518 or pmeighan@nashuatelegraph.com.