The Star Beacon; Ashtabula, Ohio

January 12, 2013

Aqua officials drop in on Ashtabula County commissioners

Star Beacon

JEFFERSON — Officials from Aqua America and Aqua Ohio met with commissioners Friday morning to provide an update on the water utility’s efforts to improve the reliability of its system in Ashtabula County.

The entourage included Ed Kolodziej, Jr., president and CEO of Aqua Ohio; Nicholas DeBenedictis, chairman and president of Aqua America; and Tony Mancari, area manager for the Lakeshore Division of Aqua Ohio.

Aqua last year acquired the private water systems in Ohio that were previously owned by Ohio American Water Company. OAWC swapped its water utility holdings in Ohio for Aqua’s sewer-treatment utilities in New York. DeBenedictis said the deal prevented the Ohio water systems from falling into the hands of a private equity firm, which would have paid more for the system yet not made the kind of investments Aqua is making.

The acquisition moved Aqua Ohio to the status of second-largest private water system in Ohio, with about 150,000 connections. Mancari said about 45,000 of those are in his area, which includes the greater Mentor area and former OAWC holdings in Ashtabula County.

“It gives us a lot more critical mass here,” DeBenedictis told the board. He said Aqua is focusing its operations on states where shale gas and oil exploration is poised for growth, and the company is “ready to invest” in water treatment and delivery infrastructure in those areas.

Commissioners have an interest in what happens with Aqua because the company sells bulk water to the county’s water system. Aqua depends upon the county’s water system to get water to its customers in Jefferson Village. Both entities have an interest in maintaining reliability across the two systems.

Larry Meaney, director of the Ashtabula County Department of Environmental Services, said the department has noticed more consistent pressure in the system since Aqua completed pump and valve projects.

“We would experience erratic pressure with Ohio American Water,” Meaney said. Surges in the line pressure can and have caused breaks in the county-owned lines, he said.

Aqua has already replaced more than 90 valves throughout the system and spent more than $200,000 on a water main replacement project in Jefferson Village. The company also did extensive work on the 24-inch main that feeds the entire system, and is spending $10 million on renovations to the water treatment plant in Ashtabula. That is one-third of what Ohio American Water said it would cost to bring the plant up to standards.

Electrical and filtration upgrades and more efficient, responsive pumps are among the investments that Aqua made to the plant. DeBenedictis said the work is all about making the system more reliable while ensuring water quality.

As a result of the improvements made at the plant, employees are now proud to show family and visitors where they work. Ed Kolodziej said that ties into the company’s philosophy that employees need to treat the infrastructure “as if it were their own” and managers invest the capital allocations as if were their money.

“What’s so neat is that they take it to heart and have refurbished and redone these older plants to the point where employees are proud to show people where they work,” Kolodziej told the board.

OAWC’s history of large and frequent rate requests has been a sore spot          with commissioners. DeBenedictis told the board that the company has a five-year capital spending plan and, thanks to state legislation passed last year, the utility will be able receive small annual increases for infrastructure spending without having to take large rate cases before the Public Utilities Commission of Ohio.  He reminded the board that Aqua returns about 20 percent of its revenues to the community in way of property taxes.

DeBenedictis said engineers estimate that Ohio’s public water infrastructure system requires nearly $10 billion in investment. Unfortunately, the need to replace and upgrade comes at a time when consumers are seeing smaller paychecks and rising costs in other household commodities.

“We must nibble away at this elephant that has to be addressed,” DeBenedictis said.

The Aqua officials agreed to meet with commissioners quarterly to provide an update on system improvements and discuss issues.