Towns keeping an eye on water deal

Acknowledging the battle isn’t over, local town officials say the recent ruling by state regulators protects their interests if and when Nashua acquires Pennichuck Water Works.

Officials also say they’ll hold Nashua to its word that a regional water district would govern the water utility.

The state Public Utility Commission’s July 25 decision allowing the city to take over the utility by eminent domain also affects communities served by Pennichuck Water Works.

While towns extending from Derry to Pittsfield fall into Pennichuck’s sphere, five communities besides Nashua are part of the water utility’s core system.

Those towns are Amherst, Bedford, Hollis, Merrimack and Milford.

The complex, 120-page ruling gave Nashua the green light to acquire Pennichuck Water Works for $243 million, of which $203 million is the price that the PUC set for the company. Regulators added the other $40 million to safeguard the two other small utilities controlled by PennichuckWater Works.

Pennichuck officials said Monday they would appeal the decision.

The ruling also addresses Pennichuck customers outside Nashua.

One issue important to Merrimack is that the existing bulk water agreement would be honored in full if Nashua acquires the utility, Merrimack Town Manager Keith Hickey said. Another is that customers in and out of Nashua would be treated fairly and equitably, he said.

That means Nashua can’t keep rates within the city constant while raising water rates for its other customers, Hickey said.

If Nashua runs the utility, the PUC would continue to regulate water service to customers within and beyond Nashua, the ruling states.

“Nashua, therefore, may not raise rates unless there is a cost basis for doing so and the commission approves such an increase,” the three commissioners concurred in the ruling.

“As to ensuring these customers receive the same quality and quantity of water as customers located within Nashua, we note that being on the core system these customers take service from the same distribution system that supplies inside customers. Thus, core customers residing outside Nashua will receive the same quality and quantity of water as customers residing inside Nashua.”

Later, the commissioners wrote, “Nashua agrees to apply its water ordinance, including the main extension policy in the ordinance, in a manner that does not discriminate between customers inside and outside of Nashua.”

Bedford Town Councilor Michael Scanlon said his town supported Nashua during the PUC hearings. The city committed to turning the operations of the utility over to a regional water authority, Scanlon said.

“I don’t think the regional water district was part of the ruling,” Scanlon said. “Hopefully, that was part of the decision-making process.

“I don’t believe necessarily that government should be involved in running a business.”

However, Bedford supported Nashua partly because town officials believed it was important to maintain local control of the region’s water supply, Scanlon said.

Officials from one of Pennichuck’s biggest customers, the Anheuser-Busch brewery in Merrimack, also expect Nashua to honor a commitment it made in testimony before the PUC.

“To produce our beers, Anheuser-Busch needs a high-quality and reliable water supply at a predictable price,” said John Mills, plant manager of the Merrimack brewery.

“Pennichuck has met that need for more than 35 years. The city of Nashua stated before the PUC that they would continue to provide our brewery with satisfactory water service, and we have no reason to believe otherwise.”

Amherst was an original member of the regional water district, noted Gary MacGuire, town administrator.

“We’ll continue to follow the developments with great interest,” MacGuire said.

In January, the Nashua Board of Aldermen approved a contract with Milford that protects the town’s emergency water supply should the city acquire Pennichuck Water Works.

Former Mayor Bernie Streeter signed the agreement on his final working day in office. Streeter long had led Nashua’s efforts to acquire Pennichuck.

Hickey said the PUC’s ruling didn’t surprise him.

Keeping the water supply under local control “is the right thing to do, whenever possible,” Hickey said.

Russell Marcoux, the Bedford town manager, noted the final outcome of Nashua’s case seems miles away, with the appeal pending.

“The unfortunate part of it is all the legal fees on both sides, which would only add to the trauma of the whole thing,” Marcoux said.