Tuesday, October 21, 2014
My Account  | Login
Nashua;45.0;http://forecast.weather.gov/images/wtf/small/nbkn.png;2014-10-21 07:50:14
Saturday, December 8, 2012

Nashua alderman wants meeting with Pennichuck leadership over potential surcharges

NASHUA – A city alderman is questioning Pennichuck Corp.’s board of directors and leadership upon learning that the water utility will request funds to upgrade its infrastructure that may require surcharges from ratepayers.

In a letter to aldermen, Mayor Donnalee Lozeau and city corporation counsel, Ward 4 Alderman Art Craffey asked that the city hold a public session with Pennichuck’s board and senior leaders before the company files its request to cover costs related to repairing and upgrading water mains, hydrants and other equipment. ...

Sign up to continue

Print subscriber?    Sign up for Full Access!

Please sign up for as low as 36 cents per day to continue viewing our website.

Digital subscribers receive

  • Unlimited access to all stories from nashuatelegraph.com on your computer, tablet or smart phone.
  • Access nashuatelegraph.com, view our digital edition or use our Full Access apps.
  • Get more information at nashuatelegraph.com/fullaccess
Sign up or Login

NASHUA – A city alderman is questioning Pennichuck Corp.’s board of directors and leadership upon learning that the water utility will request funds to upgrade its infrastructure that may require surcharges from ratepayers.

In a letter to aldermen, Mayor Donnalee Lozeau and city corporation counsel, Ward 4 Alderman Art Craffey asked that the city hold a public session with Pennichuck’s board and senior leaders before the company files its request to cover costs related to repairing and upgrading water mains, hydrants and other equipment.

“The current Board of Directors has been in place for less than one year,” Craffey wrote in the letter. “Why is it necessary to be filing a 3-year plan for Water Infrastructure and Conservation Adjustment (WICA) related project expenses for the years 2013 through 2015 to the New Hampshire Public Utilities Commission for review and approval before the end of this year?”

Pennichuck told ratepayers in its fall newsletter that it would file the WICA request for unspecified improvements in 2013. It would be the first time Pennichuck has used the system, which also is fairly new to New Hampshire.

“Why the need to push through when I believe it was covered under capitalization borrowing/
bonding?” Craffey wrote.

Under WICA, water companies can seek quick approval to pay for specific repairs rather than waiting for annual rate-setting hearings before the state’s Public Utilities Commission, which oversees utilities that provide water, electricity, telephones, natural gas and other services.

According to the PUC’s Gas and Water Division, the WICA system has only been used by a Seacoast water utility, Aquarion, so far.

Pennichuck’s request could create a rate surcharge of up to 2 percent a year and a maximum of 7.5 percent total over the three years. Nashua officials said they would lower water rates when the city purchased Pennichuck for $152 million on Jan. 25.

The first PUC hearings on Pennichuck’s overall water rates since the city bought the utility are scheduled for next year. These rate hearings are separate from the WICA request, and it isn’t clear how the WICA process would affect the rate-setting process.

“Why was this not revealed as part of the negotiations prior to the acquisition of PWW before the city of Nashua spent $220M?” Craffey wrote, tacking on the $60 million in outstanding debt Pennichuck assumed in the purchase. Aldermen approved the borrowing of as much as $220 million to buy the utility.

“Did the Transition Manager and team not adequately complete its due diligence on behalf of the City?” he asked.

Not all aldermen were surprised about the possible surcharges, however.

“I think it’s worth hearing more about it,” Alderman-at-Large Barbara Pressly said Friday. “I have known all along that our infrastructure has been neglected over many years under private ownership because they were preparing to sell it. I know there’s a lot of work to do. I think it’s important that we get together, and it’s as good a time as any to have a chat with them and discuss things in general.”

The city made history when it acquired the private water utility, which covers communities as far north as North Conway.

Although the city became Pennichuck’s sole shareholder in the acquisition – it paid $29 a share for Pennichuck stock, for about 4.7 million shares totaling $137.8 million – the utility remains private and independent in some respects.

For instance, it’s run by an independent, 10-
member board of directors, which includes Lozeau for a two-year term.

“It’s too soon to know whether that filing will be for an increase or decrease, or leaving it the same,” Lozeau told The Telegraph of the WICA request last week. “I know it will be substantially less than it would have been under the last administration.”

Another complexity is the fact that Pennichuck Corp. also oversees subsidiaries Pennichuck East Utilities and Pittsfield Aqueduct Co. in addition to Pennichuck Water Works.

Maryalice Gill can be reached at 594-6490 or mgill@nashua
telegraph.com. Also, follow Gill on Twitter (@Telegraph_MAG).