DF 97-225
PENNICHUCK CORPORATION/PITTSFIELD AQUEDUCT COMPANY
Petition for Approval of Acquisition
Order Scheduling Hearing
O R D E R N O. 22,820
January 5, 1998
On October 21, 1997, Pennichuck Corporation
(Pennichuck) and its subsidiary Pennichuck Water Works, Inc.
(PWW), a regulated utility in the State of New Hampshire,
(collectively, the Petitioners) jointly filed with the
Commission, pursuant to RSA 374:33, a Petition for Approval of
Acquisition of Capital Stock of Pittsfield Aqueduct Company
(Pittsfield), which provides water service to a portion of the
Town of Pittsfield. Pennichuck would acquire all of the issued
and outstanding capital stock of Pittsfield and other incidental
property and rights necessary to continue the uninterrupted
operation of Pittsfield as a public utility water company.
Pittsfield joins in the Petition for the purpose of evidencing
its consent to the proposed acquisition. The Agreement is
conditional upon the Petitioners receiving certain assurances
from the Commission with respect to rate base, rate of return,
and level of rates, in particular in relation to benefits granted
to Pittsfield in Order No. 22,327, issued September 23, 1996 in
DF 95-016.
An Order of Notice was issued November 21, 1997 which
scheduled a prehearing conference for December 8, 1997, ordered
that Pennichuck publish a copy of the Order of Notice by November
26, 1997, set deadlines for intervention requests and objections
thereto, and required the Parties and Commission Staff (Staff) to
summarize their positions with regard to the filing for the
record.
At the prehearing conference, in accordance with the
Order of Notice, Pennichuck, Pittsfield and Staff stated their
positions with regard to the filing for the record. In addition,
Rene Pelletier from the Department of Environmental Services
explained safe drinking water problems in Pittsfield and
supported Pennichuck's involvement.
Pennichuck stated that its acquisition of Pittsfield on
or before December 31, 1997 was in the public interest, that its
technical and management expertise in water company operations
was necessary for the future operation of Pittsfield, that the
merger would maintain intact the Pittsfield water utility
franchise and that rates of Pittsfield would not be affected by
the merger. Pennichuck asked that the Commission issue an Order
Nisi approving the merger effective as of December 31, 1997.
Pittsfield stated that it had sought possible buyers
for its water system for approximately a year and that it
regarded Pennichuck as an extremely qualified prospect whose
expertise was needed to help it comply with requirements of the
Safe Drinking Water Act and the NH Department of Environmental
Services.
Staff stated that it was prepared to support the
proposed merger if Pennichuck and Pittsfield could confirm that
the $100,000 acquisition premium referred to in the Agreement and
Plan of Merger would not be collected from Pittsfield ratepayers
and would not be charged to the Town in its proposed acquisition.
On December 12, 1997, Pennichuck filed testimony reporting that
the acquisition premium was for real estate and other expenses.
Also at the prehearing conference, a representative of
the Town of Pittsfield (Town) presented a letter from the
selectmen of the Town seeking to intervene in this matter,
objecting to the proposed merger and to the continuation of the
rate structure applied to Pittsfield being applied to the entity
resulting from the proposed merger, and indicating that the Town
has taken an initial vote pursuant to NH RSA 38 to acquire
Pittsfield by eminent domain. The Town's position is that the
Commission should defer ruling on the proposed merger until an
additional vote is taken regarding the eminent domain action of
the Town.
We are persuaded that the Town has a sufficient
interest in the outcome of this proceeding pursuant to RSA 541-A:32 to warrant intervention. Further, we believe it would be
inappropriate to make a determination on this petition without an
evidentiary hearing. Therefore, we will conduct a hearing on the
proposed merger on January 21, 1998 at 10:00 A.M. We deny the
Town's request that we defer action pending further vote of the
Town.
Based upon the foregoing, it is hereby
ORDERED, that the Town of Pittsfield is granted
intervention; and it is
FURTHER ORDERED, that a hearing on Pennichuck's
proposed acquisition be held before the Commission located at 8
Old Suncook Road, Concord, New Hampshire on January 21, 1998 at
10:00 A.M.
By order of the Public Utilities Commission of New
Hampshire this fifth day of January, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary