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Water company aims to add 50G Nassau customers

Long Island American Water has lifted water restrictions

Long Island American Water has lifted water restrictions in southern Nassau County. (July 30, 2010) Photo Credit: Danielle Finkelstein, 2010

American Water, the New Jersey company that owns much of Nassau County's public water system, has filed its formal application to buy, for $42 million, a system that serves about 50,000 customers in Oyster Bay and Hempstead towns.

The seller is Aqua America.

The formal application, filed Wednesday with the state Public Utilities Commission, takes the form of a joint petition from American and Aqua.

The two companies say the sale would be in the public's best interest because the two New York systems -- American's and Aqua's -- are geographically so close that "it makes more sense for them to be owned by one company and ultimately to consolidate their operations."

American Water already owns the water system serving 220,000 people in 31 Long Island communities. Nationally, American Water serves about 15 million people in 30 states.

If approved, the merger in New York would see two major sets of customers on Long Island switching from Aqua to American.

One, New York Water Service Corp., now provides water to about 45,000 customers in the townships of Hempstead and Oyster Bay, in a 21-square mile area encompassing all of Merrick, Bellmore, Wantagh, Seaford and East Massapequa; and parts of North Merrick, North Bellmore, Levittown and Massapequa park.

The second, Aqua New York of Sea Cliff, provides water to 4,300 customers in Oyster Bay Town.

Other than those two Long Island systems, Aqua NY has fewer than 1,100 customers in Westchester and upstate New York.

American water disclosed in its Wednesday filing that it plans, at first, to operate the acquired Aqua NY system separately from its existing Long Island Water subsidiary, "and then to integrate the operation of the companies in an organized and systematic fashion over a reasonable period of time."

The value of the transaction, for the New York assets, is $42.1 million, American Water said.

The companies said that, in effect, they want to trade Aqua's New York holdings to American Water. In exchange, American Water would give its properties in Ohio to Aqua.

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