SCRANTON — A proposed merger of American Water Works, which is the parent firm of Pennsylvania American Water, and Essential Utilities, the parent company of Aqua Pennsylvania, will not raise rates, an attorney for American Water said Thursday during a public hearing.
The two parent companies announced in October the proposed merger to become “a leading regulated U.S. water and wastewater public utility” with a combined value of $63 billion. The agreement calls for American Water shareholders to own 69% of the combined company and Essential shareholders to own 31%.
The merger application remains pending with the Pennsylvania Public Utility Commission, which is conducting in-person and telephonic hearings throughout the state to receive public input on the joint application.
In introductory remarks made during a Thursday afternoon hearing at the Radisson at Lackawanna Station hotel, American Water Works attorney Mark Lazaroff said a merger would not increase water, wastewater or natural gas rates that customers of the utilities pay; and operational efficiencies achieved by combining the companies would keep future rate increases lower than they otherwise would be without a merger.
“The merger will not change the water, wastewater and natural gas rates in effect at the time of closing,” Lazaroff said. “No acquisition or transaction cost will be passed on to customers, and anticipated efficiencies are expected to help moderate future rate increases.”
A merger would produce “substantial benefits” to customers, the public and state because a combined company would have greater financial strength and deeper resources to “support sustained investment in critical infrastructure in Pennsylvania, much of which is a century old and in need of renewal,” Lazaroff said. A combined company also would be able to better invest in and deploy innovative technology, and leverage research and development capabilities, he said. “Together, we will have expertise to continuously improve our infrastructure and meet the evolving needs of our customers.”
Attorneys for the state Office of Consumer Advocate, an independent agency under the state attorney general’s office, and the Pennsylvania Utility Law Project, which represents the nonprofit Coalition of Affordable Utility Services and Energy Efficiency in Pennsylvania, also known as CAUSE-PA, each said their organizations have filed formal protests opposing the merger.
“In a few weeks, we’ll be submitting our written testimony explaining why we believe the merger does not meet Pennsylvania’s standard of providing substantial affirmative public benefits and recommending that the merger not be approved,” Office of Consumer Advocate attorney Joel Cheskis said,
John Sweet, an attorney representing CAUSE-PA, said that organization questions whether the merger is in the public interest and would result in substantial public benefits. CAUSE-PA is investigating impacts on future rates and terms and conditions of service on customers and programs designed to assist low- and moderate-income consumers.
Only one member of the public spoke at the hearing: White Haven Borough Councilman John Klem. He testified that Aqua took over his municipality’s water and wastewater services about 20 years ago and generally overall has done a good job improving services, and also has had a positive impact on the community. Aqua’s office in the small borough is one of its largest employers. The borough takes no position on the merger, but if it’s approved, the borough hopes Aqua would maintain its office in the borough, Klem said.
“We’re asking that, in the future if this merger goes through, that the local office stay intact,” Klem said during the hearing.
Afterward, in speaking to media, Klem said he was glad to hear that a merger would not result in rate hikes. He attended the hearing to testify because, “When you get a merger, sometimes they get too big, they forget about the little people.”
Another PUC hearing also was scheduled at the Radisson for Thursday at 6 p.m.
According to the application filed with the PUC, American Water and its subsidiaries provide water and wastewater services to 3.5 million customer connections, or more than 14 million people in 14 states, including Pennsylvania. Essential provides water, wastewater and natural gas services to approximately 5.5 million people in Pennsylvania and nine other states.
American Water is the largest and most geographically diverse publicly traded water and wastewater utility company in the nation. Its Pennsylvania American Water subsidiary serves 682,000 water customers and 97,000 wastewater customers in 37 counties across the state. PAW is the largest investor-owned water utility in the state, providing water and/or wastewater services to 2.4 million people in Pennsylvania. PAW’s Northeast Pennsylvania territory has 36 water systems in the counties of Carbon, Lackawanna, Lehigh, Luzerne, Monroe, Northampton, Pike, Schuylkill, Susquehanna, Wayne and Wyoming. In Lackawanna County, PAW owns and operates the Lake Scranton water system and the wastewater system serving Scranton and Dunmore.
Essential’s Aqua provides water and wastewater services across eight states. The Aqua Pennsylvania subsidiary supplies water to 1.5 million people in 32 counties in the Keystone State. One of Aqua Pennsylvania’s five service areas is the Honesdale/White Haven Division Service Area, which serves parts of Carbon, Lackawanna, Lehigh, Luzerne, Monroe, Northampton, Pike, Schuylkill, Susquehanna, Wayne and Wyoming counties.
Empty chairs fill a ballroom at the Radisson at Lackawanna Station Hotel in Scranton during a Public Utility Commission hearing Thursday, April 30, 2026. (SEAN MCKEAG / STAFF PHOTOGRAPHER)
John Klem, of White Haven, speaks to a panel during a Pennsylvania Public Utility Commission hearing at the Radisson at Lackawanna Station Hotel in Scranton Thursday, April 30, 2026. (SEAN MCKEAG / STAFF PHOTOGRAPHER)
Steven Haas, administrative law judge for the Pennsylvania Public Utility Commission, speaks during a hearing at the Radisson at Lackawanna Station Hotel in Scranton Thursday, April 30, 2026. (SEAN MCKEAG / STAFF PHOTOGRAPHER)
Office of Consumer Advocate attorney Joel Cheskis speaks during a Pennsylvania Public Utility Commission hearing at the Radisson at Lackawanna Station Hotel in Scranton on Thursday, April 30, 2026. (SEAN MCKEAG / STAFF PHOTOGRAPHER)
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Empty chairs fill a ballroom at the Radisson at Lackawanna Station Hotel in Scranton during a Public Utility Commission hearing Thursday, April 30, 2026. (SEAN MCKEAG / STAFF PHOTOGRAPHER)