March 2, 2011

Residents: Buy out water systems

Union Leader Correspondent
DERRY -- Nashua’s mayor spoke before the Derry Town Council last night to address the effects of the city’s potential takeover of Pennichuck Corporation, which provides water for about 2,800 people in Derry.
But residents who spoke at the meeting said they were more interested in seeing Derry buy out the water systems within the town limits.
“Right now, I see this as a negative to the people of Derry,” said resident Joe Lunetta, who lives in the Drew Woods area serviced by Pennichuck. “I don’t see the benefit of Nashua selling a portion of the water to certain Derry residents when others are getting better water
 at a better price.”

Pennichuck recently connected the Drew Woods area to Derry’s main water system. That connection is expected to be opened next month.
In 2010, the town of Derry grossed about $107,000 by selling water to Pennichuck, said Deputy Public Works Director Thomas Carrier at Tuesday’s meeting. Next year, he said that number is expected to top $200,000 with new connections.
But for some Pennichuck customers, like Town Treasurer Rita Correia, being forced to pay higher water rates than neighbors is hard to swallow.
As a customer of Pennichuck East Utility, Correia gets her water a rate of $16.49 per month plus $5.61 per 100 cubic feet usage. Customers on the Pennichuck Water Works system pay $20.14 per month plus $3.21 per 100 cubic feet of water used.
By comparison, customers who get their water from the Derry Water Department pay $22.88 per quarter, with a base charge of $2.37 per 100 cubic feet of usage.
Correia said her most recent water bill was for $116.79.
“If the water is coming from Derry, you’ve got to sell it to Pennichuck and Pennichuck has got to sell it back to me,” said Correia. “If I’m going to pay a rate increase, I may as well pay it to Derry. Then eventually (the acquired system) gets paid off and I get to have a water rate of $22.88 some day.”
But under Nashua ownership, city Mayor Donnalee Lozeau said she expects customers in all municipalities to see lower rates than if the system continued under Pennichuck.
“The drive won’t be that we have shareholders that await a return,” she said Tuesday. “It would be for customers who have an expectation for a level
 of service at a certain price.”
If the acquisition is approved by the Public Utilities Commission and Pennichuck shareholders, the city of Nashua would purchase the utility for $138 million and assume the company’s $60 million debt, Lozeau said.
City aldermen in January approve a bond amount of up to $220 million to fund the purchase, she said.
If approved, Lozeau said most of the system’s existing employees would remain in place, governed by a board of directors consisting of five Nashua residents and representatives form other towns on the existing Pennichuck system.
The city would continue Pennichuck’s practice of investing about $7.7 million into capital improvements to the system each year, she said.
Lozeau has been making the rounds to other towns on the Pennichuck system to discuss the proposed acquisition.
And she said the desire for towns to ultimately buy back water lines is not unique to Derry.
“I can’t help but say that I would feel the same way if I were in your community,” Lozeau said. “You’re running a system and you’re running it at much less of a cost. The same could be said for other communities in the system that are having the same struggle.”
“But we’re not in a position to have that discussion of what kinds of things we could all do as municipalities,” she said. “We have to get through the acquisition process.”
Nashua transaction executive John Patenaude said Pennichuck shareholders will vote on the acquisition in May and that the Public Utilities Commission hearing on the acquisition is scheduled for the end of June.

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