Virginia American Water finalizes acquisition of Cape Charles Water and Wastewater System

May 10, 2024
 |
Cape Charles Water Deal

Pictured: front left Town Manager John Hozey, back left Mayor Charney, back right Vice Mayor Bennett, and front right Charlie Piekanski, VP of Operations for VAW.

Virginia American Water announced it has closed the acquisition of the drinking water and wastewater system assets of the Town of Cape Charles, Virginia for $15 million. This acquisition brings approximately 1,400 water and wastewater customers to Virginia American Water and is the second to be completed by the company under the Fair Market Value Legislation enacted by the Virginia General Assembly in 2020.

As part of the acquisition, Virginia American Water will invest more than $10 million in future critical system improvements over the next eight years. A comprehensive planning study will be completed during the first year to identify and prioritize the required capital investment projects to improve the systems and the quality of the drinking water.

“We are delighted to welcome the residents of Cape Charles as our newest customers. Thank you to Mayor Adam Charney, the Town Council, and Town Manager John Hozey and his staff for their support throughout the process. The customers who join us with this acquisition will benefit from our company’s expertise in operating drinking water and wastewater systems, including a stellar record of water treatment, water quality testing and compliance. They will receive the same high-quality service that our customers throughout the state expect and deserve,” said Barry Suits, president of Virginia American Water.

“Joining Virginia American Water was the right decision for Cape Charles. This has been a lengthy process to allow the amount of due diligence needed for a decision of this magnitude and for the transparency and public input we committed to from the beginning. As a partner, Virginia American Water brings the expertise needed to properly operate both our water and wastewater systems, as well as economies of scale that will benefit our customers that the Town couldn’t have achieved on its own. We are also thrilled to see our eight utility employees transition to become Virginia American Water employees, keeping all that local knowledge and experience here working for our residents,” said John Hozey, Cape Charles Town Manager.

The Town of Cape Charles signed an agreement to sell its drinking and wastewater systems to Virginia American Water in January of 2023, based on the need to upgrade the system’s infrastructure and bring additional experience and expertise in water management.

“This transaction was four years in the making.  We spent considerable time and energy working through it and doing our due diligence.  The result is that we now have the needed expertise to run these systems property, an operator who will work to improve the water quality in town and has the capital to make the needed future investments in the systems ($10 million dedicated over the next 8 years), and the ability for us tie into a statewide rate structure that will keep rates lower than they otherwise would have been going forward, as costs can now be spread over many more people than just the 1,300 rate payers in Cape Charles,” Hozey added.

According to Hozey, the Town Council has already decided to use a portion of the sale proceeds ($15 million) to pay off all of Cape Charles’ bonded indebtedness, which frees up hundreds of thousands of dollars in debt service payments every year in the town’s operating budget. The Council has directed that this savings be passed on the residents in the form of lower real property taxes, which will be included in the upcoming FY25 budget that goes into effect on July 1. 

“This is a great thing for Cape Charles, and we’re all pretty excited to see it finally come to fruition,” he said.

Virginia American Water will be sending information to customers served by the Cape Charles Systems this week, including how to enroll in MyWater, the company’s online customer portal, as well as other customer service information and benefits. The company also provides bill paying assistance programs, conservation tips and more.

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May 23, 2024, 5:19 pm
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