Water company awaits stock sale to British-German firm

Water company awaits stock
sale to British-German firm
By kathy baratta
Staff Writer

HOWELL — The New Jersey-Amer-ican Water Co. is in the process of being sold to an international company.

Company spokesperson Gloria Gledhill told the Township Council that the sale of New Jersey-American’s parent company to RWE/Thames Water Co., a British-German company, is expected to receive final approval from the state Board of Public Utilities in September.

Gledhill told the governing body at its July 22 meeting that the state would still own the water and that the sale was "simply a stock purchase." Gledhill said the only change would be that the Thames Water Co. owns the Elizabethtown Water Co. and there was talk the two might merge at a future date.

The Elizabethtown Water Co. is based in Union County.

Gledhill said these coming changes were a good thing.

"We at the company see it as a global opportunity. The company is buying security and expertise," Gledhill said, noting that with concerns of terrorism now a reality for water companies, the merger with RWE-Thames would provide much needed expertise.

Gledhill said the Thames Water Co. is the third largest water company in the world and is "used to dealing with terrorists."

New Jersey-American Water Co. Director of Government Affairs Lendell Jones said the merger would provide a much needed infusion of cash that would mean more money would be spent on ongoing maintenance of existing lines.

"It will give us better access to capital to do things we’re not doing now," Jones said.

Councilwoman Cynthia Schomaker asked if the merger would result in rate hikes for New Jersey-American’s customers.

Jones said the company cannot raise rates as a result of the transaction and that a rate hike was not expected until 2004 or 2005.

Interim Township Manager Bruce Davis opined that if the Elizabethtown Water Co. merger occurred, the result could possibly be rate reductions. Davis said this would be possible due to the company being able to expand its overall debt over a larger customer base, which could translate into rate decreases.

"With the activity and responsiveness, I could foresee a decline," he said.

Deputy Mayor Kimberly Alvarez agreed with Davis and said the merger would increase the company’s capabilities.

Jones said another benefit would be a "tighter service level."

Regarding concerns from the governing body that a foreign company might not keep the company running and well regulated, Jones said, "We have the alphabet soup (referring to the abbreviations of state and federal entities) that oversees water in this state. That will not change."