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State Of New Jersey Division of Ratepayer Advocate  


In the Matter of the Petition of Aqua New Jersey Inc for Approval to Acquire the Assets of Berkeley Water Company and Other Required Approvals
BPU Docket No. WM0412676

Berkeley Township, New Jersey
June 28, 2005

Good afternoon, my name is Susan McClure. I am an attorney representing the New Jersey Division of the Ratepayer Advocate. The Division of the Ratepayer Advocate (“Ratepayer Advocate”) represents the interests of all utility customers, including residential, small business, commercial and industrial ratepayers. The Ratepayer Advocate is a party in every case where New Jersey utilities seek changes in their rates or services. The Ratepayer Advocate also gives customers a voice in setting long-range energy, water and telecommunications policy that will affect utility services well into the twenty-first century.

On December 29,2004, Aqua New Jersey, Inc. (“Aqua” or “Company”) filed a Petition with the New Jersey Board of Public Utilities (“Board” or “BPU”) seeking approval to acquire the assets of the Berkeley Water Company (“Berkeley”) and other required approvals.

Aqua is a regulated public utility organized and operating under the laws of the State of New Jersey and providing water service to approximately 42,300 customers in 16 municipalities in Warren, Hunterdon, Mercer, Burlington, Monmouth, Camden Gloucester Counties, New Jersey. Aqua is a wholly owned subsidiary of Aqua America, Inc. Aqua America, Inc. is the nations largest U.S. based publicly traded water utility, providing water and wastewater services to approximately 2.5 million residents in New Jersey, Pennsylvania, Ohio, Illinois, Texas, Indiana, Virginia, Florida, North Carolina, Maine, Missouri, New York and South Carolina.
On November 17, 2004, the Company submitted a sealed bid of $4,210,000 for the assets of Berkeley. The Company was notified on November 17, 2004, that its bid was the winning bid for Berkeley. Berkeley was incorporated in 1959 to provide water service to portions of Berkeley Township. Berkeley serves approximately 4,000 residential and commercial customers in the Bel Air section of Berkeley Township, Ocean County.

The Company asserts that the proposed transaction will have no adverse impact on existing Berkeley rates or employees. Aqua will operate Berkeley under its existing tariffs and rate structures until such time as the Company files a Petition with the BPU to revise its tariffs and rate structure. The Company asserts that the proposed acquisition will also not have an adverse impact on the provision of safe, adequate and proper utility service in fulfillment of its obligations under New Jersey law.

Our office represents the public in changes of control cases. As necessary, we work with a team of accountants and lawyers to analyze these cases. We are currently conducting a complete and thorough investigation of this Petition to evaluate whether and to what extent this acquisition will be of a benefit to the ratepayers of both Aqua and Berkeley. To that purpose, we have requested and are currently reviewing detailed information from Aqua about the acquisition.

In our investigation of this case, the Ratepayer Advocate has focused on the following issues:

  • Acquisition Adjustment—The Company has requested that the Board approve an acquisition adjustment of not more that $900,000 in this proceeding, for use in setting the Company’s rates in the future. The Ratepayer Advocate will work to ensure that this proposed net acquisition adjustment does not inappropriately, negatively effect Aqua’s ratepayers.
  • Acquisition Benefits: Our office will consider:
    • Whether the proposed acquisition will result in tangible and quantifiable benefits to the ratepayers of Aqua and Berkeley.
    • How will Aqua and Berkeley ratepayers receive these tangible and quantifiable benefits and how will these benefits be allocated among the various rate classes.
  • Ultimately, whether the proposed acquisition will affect Aqua’s ability to provide safe, reliable water service at the lowest possible rate to the customers of both systems.

We expect to question company witnesses about these concerns and to raise them at any settlement meetings. However, the ultimate decision regarding this matter will be made by the Board of Public Utilities.

The purpose of this public hearing tonight is for you, the customer, to voice your opinion, relate your experiences and offer your concerns. Berkeley’s customers may offer comments about Berkeley’s rates and any service problems you may be experiencing. It is important that you express your views, as they become part of the record on which the Board of Public Utilities makes its decisions. The Ratepayer Advocate also wants to hear your views. We strongly encourage your participation, which will help us evaluate the Company’s proposal and prepare for the hearings.

This hearing is being transcribed and your comments will become part of the record. Mr. Quirolo of the Board of Public Utilities, the hearing officer here today, will instruct you to give your name and address before you speak. I would like to reiterate the importance of this so that there will be a clear record of your concerns and interests.

On behalf of the Ratepayer Advocate, I would like to thank you for attending this hearing.

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New Jersey Division Of The Ratepayer Advocate
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