SOURCE: Pennichuck Corporation

October 16, 2008 09:44 ET

Pennichuck Corporation Announces Results of New Survey Regarding Proposed Eminent Domain Taking of Subsidiary's Assets

Survey Shows Strong Majority of Nashua Residents Favor a Different Way

MERRIMACK, NH--(Marketwire - October 16, 2008) - Pennichuck Corporation (NASDAQ: PNNW) today announced the results of a new survey conducted from September 25 - 28, 2008 by American Research Group regarding the City of Nashua's proposed taking of the operating assets of the Company's Pennichuck Water Works, Inc. regulated utility subsidiary ("PWW") by eminent domain.

Nearly two-thirds of Nashua residents believe the City should negotiate directly with Pennichuck to find a way other than eminent domain to acquire control over the water system. In addition, strong majorities want more information and another chance to vote on the issue, should the City move forward with eminent domain.

"We are not surprised that most Nashuans think there is a better way than eminent domain," said Pennichuck President and CEO Duane Montopoli. "Nor are we surprised that people need more information. Attempting to take a private business by eminent domain is a complex issue with many serious ramifications for customers. We believe the people of Nashua deserve to hear all of the facts and have another opportunity to give input on this matter."

Montopoli said Pennichuck conducted the survey to obtain, "an accurate and current view of how Nashuans feel about the eminent domain issue. The last vote on this subject was five years ago, and the ballot did not ask for approval to take the water system by eminent domain. The situation has changed significantly since that referendum."

In July 2008, the New Hampshire Public Utilities Commission ("NHPUC") ruled that Nashua could take the operating assets of PWW by eminent domain for $243 million. $40 million of that amount would be placed in a mitigation fund to protect the interests of the customers of the Company's other two regulated utilities. Those other two utilities would not be subject to the takeover. In response to the NHPUC order, the Company and the City have filed motions for rehearing before the NHPUC and the Company has announced that, if necessary, it will consider an appeal to the New Hampshire Supreme Court. If the City's right to take the utility assets is ultimately upheld, its aldermanic board would then still have to decide whether or not to proceed with the taking assuming the City is able to finance the purchase.

The survey showed that 79% of respondents opposed the eminent domain takeover when they learned about the $40 million mitigation fund for the benefit of Pennichuck customers in other municipalities.

Montopoli noted that there are many aspects of the eminent domain dispute that Nashuans may not be fully informed about. In fact, when asked, "Do you believe the public needs more information about a takeover by eminent domain before the City of Nashua moves forward in that regard?" 74% responded, "Yes, needs more information." Sixty-three percent of those surveyed believe the public deserves the right to vote before the City moves forward with eminent domain.

Other significant survey findings include strong opposition (78%) to having a foreign-owned company operate the water system for Nashua, and strong opposition (71%) to the takeover upon learning that customers could face a consequential rate hike of 40% or more. Nearly three-quarters of those surveyed also opposed the takeover when told that more than 30 current Pennichuck employees could lose their jobs as a result.

The survey, which interviewed 400 randomly selected adults in Nashua, showed that residents are evenly split (44%-42%) on the general question of whether the City should own and operate its drinking water system, but only 14% believe the City could do a better job than Pennichuck in running the system.

Montopoli concluded, "It is very clear that residents oppose Nashua's proposed eminent domain takeover when they learn about the consequences. It is also clear that Nashuans want direct negotiations between the City and Pennichuck, outside of eminent domain, if any transaction is to take place. We remain open to such discussions."

The full survey questionnaire and results are available at www.pennichuck.com.

Pennichuck Corporation is a holding company involved principally in the supply and distribution of potable water in New Hampshire through its three regulated water utilities. Its non-regulated, water-related activities include operations and maintenance contracts with municipalities and private entities in New Hampshire and Massachusetts. The Company's real estate operations are involved in the ownership, management and commercialization of real estate in southern New Hampshire.

Pennichuck Corporation's common stock trades on the Nasdaq Global Market under the symbol "PNNW."

This news release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Pennichuck Corporation. Forward-looking statements are based on current information and expectations available to management at the time the statements are made, and are subject to various factors, risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the timing and results of a rehearing before the New Hampshire Public Utilities Commission regarding its recent eminent domain order (the "Eminent Domain Order") in favor of the City of Nashua, New Hampshire; the timing and results of a possible appeal to the New Hampshire Supreme Court regarding the Eminent Domain Order; the impact of an eminent domain taking by Nashua on business operations and net assets; legislation and/or regulation and accounting factors affecting Pennichuck Corporation's financial condition and results of operations; the availability and cost of capital, including the impact on our borrowing costs of changes in interest rates; and, the impact of weather. Investors are encouraged to access Pennichuck Corporation's annual and quarterly periodic reports filed with the Securities and Exchange Commission for financial and business information regarding Pennichuck Corporation, including a more detailed discussion of these and other risks and uncertainties that could affect Pennichuck Corporation's forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statement.

Contact Information

  • For More Information, Contact:
    Duane C. Montopoli
    President and Chief Executive Officer
    Phone: 603-913-2300
    Fax: 603-913-2305