Great Barrington — The Select Board met with representatives of Aquarion Water Company to discuss the possibility of the company purchasing Housatonic Water Works on Monday, October 17.
At the beginning of the meeting, Select Board Chairman Stephen Bannon said that, after several months of executive sessions, the board is now looking at two potential options to solve the long-running situation of customers dealing with poor water quality. Chairman Bannon said that representatives from Aquarion were invited to the meeting because they own the nearby water company in Sheffield and that the first option the Select Board has decided on pursuing is a private company purchasing HWW that is “capable of providing consistently clean and safe drinking water, and has the expertise and capital resources required to accomplish those goals.”
He said that the other option the Select Board is looking at is facilitating a merger of HWW and the town’s fire district. “Each of those two options brings its own unique pros and cons,” Bannon said. “For example, a merger would likely require the town to first acquire the HWW and negotiate a merger with the Great Barrington Fire District. The cost of acquisition would require approval from voters townwide, but this option would provide long-term control over our water resources and position us well for state and federal infrastructure funding when it becomes available.”
Bannon said that the option for a private company to purchase HWW would happen on a faster timeline without the need for any investment by the town or approval by the voters.
During the October 17 meeting, however, representatives from Aquarion emphasized several times that they had not yet investigated whether or not they would want to purchase HWW. It is also not known whether or not the owners of HWW would be willing to sell the company. “I just want to be clear that I don’t know if we actually want to purchase HWW,” Aquarion Director of Business Development Adam Simonsen told the board. “It’s a risky proposition.”
Toward the beginning of the meeting, Simonsen said that the company has “the financial wherewithal to make significant capital investments without looking to say ‘hey, rates need to go up.’” Simonsen continued, “Quite frankly, the idea that you would—that somebody would desire a 100 percent rate increase to fund the upgrades, is something we don’t find that as an acceptable approach as a public utility,” Simonsen said.
Simonsen was referring to HWW’s request to the state to double customer rates to cover the costs of addressing its ongoing problems with manganese contamination. “We would seek to freeze the rates at their current levels, and then we would make the investments needed to get the water that is being provided to a [quality] level that’s consistent with all of our other service areas,” Simonsen said. “At some point in the future, it is likely that rates would have to go up. I don’t want to come in and promise that nothing would ever change in terms of rates at some point. There would inevitably be an increase, but [with Aquarion] as part of a much larger entity, it’s far easier to address these affordability issues.”
During the meeting, however, Simonsen said several times that the company would have to research the potential purchase of the company further before he could give definitive answers to questions including a potential rate increase for customers. “What we would have to do is study what the full capital needs are [for the water system],” Simonsen said. “What will the projects cost? Because you would want to go and apply for that money [for state grants]. It needs to be tied to a specific project for the state level to make these decisions.”
He said that the net book value of HWW’s system is estimated to be $1.8 million. “Given the small size of the system, and any obvious sort of water quality and affordability challenges, any buyer of the system would be taking on significant risks,” he said. “Transactions of this type are made very close to the net book value of the system with very little premium associated with it.”
When Bannon asked whether or not Aquarion considered brown-colored water as an acceptable product, Simonsen was very direct with his answer. “Having discolored water is not an acceptable product,” Simonsen said.
Toward the end of the meeting, Select Board Vice Chairman Leigh Davis asked Simonsen how Aquarion would work toward restoring public trust in the water system if the company did purchase HWW. “There’s going to have to be a lot of public outreach and education that’s going to need to be done,” Simonsen responded. “We do have a couple of folks that are dedicated to public outreach and education, including putting out communications and having one-on-one conversations.”
Bannon said that the Select Board would be sending out an invitation to the Great Barrington Fire District Prudential Committee for a meeting in the next few weeks.
