EVANS CITY — Pennsylvania-American Water announced Thursday that the company has begun supplying drinking water to Evans City under a new 25-year bulk water sales agreement.

The company also completed several improvements for the borough system, which serves about 900 customers.

“Pennsylvania-American Water’s agreement with Evans City enables the borough to obtain a high-quality, cost-effective source of supply and avoid making a significant financial investment to repair its aging water treatment plant,” company spokesman Bernie Grundusky said in a news release.

“This is a great example of a public-private partnership that will bring economies of scale and rate stability for the citizens of Evans City,” said Grundusky, senior manager of business development.

Council voted in November 2010 to purchase water from Pennsylvania-American Water. Grundusky said the company spent more than $300,000 to complete upgrades necessary to connect to the borough’s water system and can provide 500,000 gallons per day.

Evans City will receive drinking water from Pennsylvania-American Water’s Ellwood City water treatment plant. The company also can provide access to an alternate source of supply from its Butler Water Treatment Plant.

Borough officials are currently examining the possibility of leasing the water facility on Route 528 to a company that would sell water for hydrofracking Marcellus Shale gas wells.