Pennsylvania American Water Announces $16.5 Million Investment to Construct and Rehab Water Storage Tanks

HERSHEY, Pa.--(BUSINESS WIRE)--Pennsylvania American Water unveiled today its 2013 construction schedule to build nine new water storage tanks, as well as rehabilitate 14 existing tanks throughout the commonwealth. The new tank construction will provide increased storage capacity to meet customer demand and improve fire protection, while the company’s rehab program of inspecting, sandblasting and repainting the existing tanks will extend their service life and protect water quality.

“The new tanks we’re building are necessary to meet customer demands for reliable water service and fire protection.”

The estimated cost of the new tank construction is $11.5 million, and the rehab projects total approximately $5 million for a combined capital investment of nearly $16.5 million.

“Storage tanks are a critical component of our water infrastructure, because they ensure that adequate, reliable water supplies are always available for the communities we serve,” said President Kathy L. Pape of Pennsylvania American Water, noting that the company currently owns and maintains more than 275 storage structures. “The new tanks we’re building are necessary to meet customer demands for reliable water service and fire protection.”

New tank construction is planned in the following communities:

• North Annville Township, Lebanon County - 750,000-gallon concrete tank, scheduled for completion by fall. Estimated cost $1.4 million
• Susquehanna Depot Borough, Susquehanna County – 680,000-gallon concrete tank, scheduled for completion by year end. Estimated cost $2.5 million
• Pittston Township, Luzerne County – 1,000,000-gallon steel tank, scheduled for completion by year end. Estimated cost $1.35 million
• Newton Township, Lackawanna County – 400,000-gallon elevated steel tank, scheduled for completion by year end. Estimated Cost $1.6 million.
• Kane Borough, McKeon County - 600,000-gallon elevated steel tank, scheduled for completion by year end. Estimated cost $1.7 million
• Delaware Township (Hickory), Pike County - 100,000-gallon steel tank, scheduled for completion by year end. Estimated cost $490,000
• Delaware Township (Silver), Pike County - 135,000-gallon steel tank, scheduled for completion by year end. Estimated cost $500,000
• East Buffalo Township, Union County - 500,000-gallon elevated steel tank, scheduled for completion by year end. Estimated cost $ 1.75 million.
• Ellwood City, Lawrence County - 200,000-gallon standpipe to supplement existing tank, scheduled for completion in third quarter 2013. Estimated cost $250,000.

Pape said, “Our rehabilitation projects not only extend the tanks’ lifespan, but they also represent a significant cost savings in contrast to replacing the structures.” Pennsylvania American Water will rehabilitate existing tanks in the following areas over the next several months:

• Green Tree Borough, Allegheny County – 2.5 million-gallon capacity elevated tank
• Liberty Borough, Allegheny County – 560,000-gallon capacity tank
• South Union Township, Fayette County - 500,000-gallon capacity Hopwood Tank
• Connoquenessing Township, Butler County – 250,000-gallon capacity elevated tank
• South Fayette Township, Allegheny County – 1.5 million-gallon capacity Mayview Tank North and 1.5 million-gallon capacity Mayview Tank South
• Lower Makefield Township, Bucks County – 1 million-gallon capacity Big Oak Tank
• Limerick Township, Montgomery County – 1 million-gallon capacity tank
• Pen Argyl Borough, Northampton County – 500,000-gallon capacity tank
• Pittston Township, Luzerne County –, 250,000-gallon capacity Vogelbacher Tank #2
• Montrose Borough, Susquehanna County – 380,000-gallon capacity tank
• Scranton, Lackawanna County – 1.9 million-gallon capacity Williams Bridge (Oakmont) Tank
• Fell Township, Lackawanna County – 750,000-gallon capacity Fallbrook Tank,
• Scranton, Lackawanna County – 2.5 million-gallon capacity Lake Scranton South Tank

The two South Fayette Township tanks in the Pittsburgh area were previously owned by Mayview State Hospital and recently acquired by Pennsylvania American Water to increase its system’s storage capacity by 3 million gallons. This increased capacity provides redundancy in the water system to avoid service interruptions in South Hills communities, as well as improve storage capacity for fire protection.

Rehabilitation crews will strip the original paint and apply a new coating, which serves as a protective barrier that prevents the steel from rusting and compromising water quality. During rehab work, the company does not expect customers to experience service interruptions. The projects include mitigation procedures to ensure that paint fumes and dust levels are in compliance with air pollution control requirements mandated by local health departments and the Pennsylvania Department of Environmental Protection.

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.2 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states and parts of Canada. More information can be found by visiting www.amwater.com.

This release contains forward looking statements, including, among others, our plan to continue our long-term strategy of capital investment in our systems. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, changes in regulations or regulatory treatment and availability and the cost of capital. We undertake no obligation to publicly update or revise any forward-looking statement.