Nashua (NH) Votes Today on Plan to Buy Water Firm
Worried that their locally run water company is about to be sold to an out-of-state corporation, more than a dozen communities served by the Nashua-based Pennichuck Corp. are considering buying all or part of the publicly traded company.
Voters in Nashua are going to the polls to say whether they want to be part of the movement to raise $167 million to preempt the sale of Pennichuck to the larger Pennsylvania-based Philadelphia Suburban Corp., which they fear could become a takeover target for even larger European-based water companies. If the referendum passes, similar votes will follow in March at town meetings across southern New Hampshire.
The issue has raised passions across the region, with residents growing fearful that a new company might further develop the watershed with more houses, office complexes or even a water-bottling plant. ''We believe water is the lifeblood of our community, essential to economic development and the value of homes,'' Alderman Brian S. McCarthy told nearly 70 residents at a public forum.
Pennichuck's critics have few complaints about the current service, but have mistrusted the company since it sold 1,100 acres of pristine land to its development division, Southwood, 20 years ago. Pennichuck decided to develop the watershed to boost the company's net income, and only about 300 acres slated for development remain untouched.
Southern New Hampshire's quest for a municipally owned water system goes against a national trend toward privatization. About 85 percent of US residents receive their drinking water from a public water utility. But as cities and towns struggle with costly repairs to aging water systems, they are increasingly looking for help from the private sector.
Just across the Massachusetts border from Nashua, a few dozen miles down the Merrimack River, Lawrence is negotiating a contract with United Water, a subsidiary of the France-based multinational Suez, one of the world's largest investor-owned water utilities, which has come under fire for its management of Atlanta's water system. In the 1930s, Lawrence boasted the nation's first filtration system. But now it needs to replace that plant, along with pipes and meters.
Pennichuck sought the merger with Philadelphia Suburban in part because it had already sold off its most developable land, according to a proxy statement prospectus on the deal.
When Pennichuck executives announced the merger last spring - to the surprise of community leaders around southern New Hampshire, who had no idea the company was looking to change its status - executives explained that the partnership could offer customers a unique opportunity for expanded services, and that it was a good deal for shareholders.
The stock-for-stock merger is still awaiting state, federal, and shareholder approvals, a process that has been delayed because Paris-based Vivendi Environment dumped a 17 percent stake in Philadelphia Suburban last summer, causing Philadelphia Suburban's stock price to slide. Still, Maurice Arel, the Pennichuck president and chief executive officer, who served as Nashua's mayor in the 1980s, believes the deal will go through and will have minimal impact on the public.
''Pennichuck will remain a New Hampshire corporation, and will continue to be regulated by the public utilities commission and the department of environmental services. I think you would find that customers wouldn't know the difference from one year to the next,'' Arel said. ''The thing you have to understand is water companies are run locally. You may have a large conglomerate [that owns them], but it's really [a collection] of local water utilities.''
But some local residents and national advocates remain unconvinced. ''When you have a locally owned company sold to a conglomerate, it really sounds the alarm bell that communities will lose accountability,'' said Hugh Jackson, a policy analyst for Public Citizen, a Washington, D.C., advocacy group that opposes water privatization. ''When you have far-flung owners, they might not be particularly concerned about water and keeping rates low.''
To buy the water company and pay for future improvements, local governments would have to raise $167 million - even if they manage to win political support in the state Legislature and more than a dozen communities. Nashua's support is considered essential and today's election is expected to draw about 10,000 voters, or roughly one-quarter of the electorate.