It looks like the sale of the Butler Area Sewer Authority to Pennsylvania American Water Company is all but concluded.

The Butler City Council on Thursday, Oct. 13, approved the sale for $231.5 million. The Butler Township Commissioners’ approval came Monday, leaving only approval by the Pennsylvania Utility Commission, a process that is expected to take nine months to a year.

In the lead-up to these actions, Pennsylvania American has been saying all the right things: All authority employees will keep their jobs, the existing sewer plant on Litman Road will remain in operation for at least a decade, existing capital improvement projects will continue to use local contractors, and there will be a one-year freeze on rate increases from the time the sale is finalized.

The company president said Pennsylvania American is well positioned to assume the estimated $75 million in needed upgrades to the authority’s system.

It sounds almost too good to be true. And therein lies the rub. Pennsylvania American is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. “Traded” means there’s stock, and stock means there are stockholders.

Stockholders, whether individuals or corporate entities, are not known for their altruistic impulses. They expect a return on their investment. Unlike a public utility, the officers of Pennsylvania American are compelled to keep an eye on the bottom line and generate profits.

It’s doubtful the company is going to put out more than $200 million to acquire the sewage authority without expecting to recoup its costs and then some. This is an investment, not a gift.

It might be wise for the customers of the former sewer authority to keep a close eye on future developments as the changeover to Pennsylvania American ownership is finalized.

It’s not certain that rates are going to go up in the future or that there might be other unforeseen developments when the rate freeze ends, but again, Pennsylvania American is in business to make money.

— EKF