Hawaii Kai sewage
system being sold

American Water Works
will pay $18.4 million,
pending PUC approval

By Rick Daysog
Star-Bulletin

American Water Works Co. will acquire a Hawaii Kai sewage treatment company from Maunalua Associates Inc. for $18.4 million.

Voorhees, N.J.-based American Water will buy East Honolulu Community Services Inc., which provides sewage treatment services for some 28,600 Hawaii Kai residents.

The purchase is American Water's first in Hawaii. American Water said the acquisition is subject to approval from the state Public Utilities Commission.

In the deal, American Water will get East Honolulu Community's 5.2 million gallons-per-day treatment center, seven pumping stations and some 100 miles of collection pipes.

George Johnstone, American Water's chief executive officer, said the company hopes to hire all 17 of the local waste water company's employees. He said the workers currently are employed on a contract basis from Pacific Services Group.

Maunalua, a unit of Kemper Corp., said the sale comes as it is refocusing its business strategy.

American Water stock dropped 25 cents today to close at $21.69 on the New York Stock Exchange.

American Water is the nation's largest investor-owned water utility company. Recently it has made a big push into the sewage treatment business, which it considers a growth market.

The Hawaii Kai deal will expand American Water's operations to 22 states. The company currently serves some 7 million customers in 800 communities.

Yesterday, American Water announced that the city of Buffalo, N.Y., awarded its affiliate AmericanAnglian Environmental Technologies a $50 million, five-year contract to manage the city's water system.