United Water and KKR to Bring Water and Sewer Investments to Borough of Middletown, PA

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We are pleased to announce that we will expand our services in Pennsylvania and become part of the growing Middletown Community. We recently announced a partnership with the Borough Authority of Middletown, PA for management and operations of the borough’s water and wastewater system, together with KKR, a leading global investment firm.

We already operate five water treatment facilities and over 20 wells serving a population of more than 166,000 people in portions of eight Pennsylvania counties. Our Pennsylvania headquarters are conveniently located in the capital city of Harrisburg. A United Water team dedicated exclusively to Middletown will operate the system for a 50-year term.

This partnership marks a growing trend in the U.S. for delivering infrastructure renewal projects for essential public services by drawing upon the strengths and balancing the needs of multiple sectors; both public and private.

This joint venture is similar to one that United Water began with the Municipal Utilities Authority in Bayonne, NJ in 2012. The partnership in Bayonne has already delivered valuable infrastructure investments and customer service improvements. Other towns that have created similar partnerships in the recent past include: Rialto, CA and Allentown, PA.

Some key features of the Middletown SOLUTION agreement include:

• An initial payment to the Middletown Borough Authority of $43 million, which will be used to eliminate the Authority’s existing debt, pension liability and improve its finances.
• $83 million worth of infrastructure improvements over the life of the contract.
• The Middletown Borough Authority will maintain ownership of the water and wastewater system and will provide oversight of the partnership and its adherence to high quality standards and customer service performance.
• The Authority will also maintain control of rates charged to users, which will be guided by a formula in the agreement.

We will operate and maintain six groundwater sources, 36 miles of water main, one wastewater treatment plant and 25 miles of sewer main, as well as manage and deliver capital upgrades. The objectives will include a strong focus on environmental, health and safety performance and an improvement to the services delivered to 9,400 people in Middletown, a number which is expected to grow over the term of the agreement.

Our commitment to continually fund improvements in the water and wastewater system is critical to keeping rates stable and under the Middletown Borough Authority’s control.

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