Indian Creek Valley Water Authority (ICVWA), a publicly owned water utility, is proposing to sell its water system to Pennsylvania American Water Company (PAWC), a privately owned water utility. ICVWA currently provides drinking water to approximately 2,389 customers across portions of Fayette and Westmoreland counties, including Saltlick, Springfield, Bullskin, Stewart, Donegal, Mount Pleasant, and Connellsville townships, as well as Ohiopyle Borough. Because PAWC is a regulated public utility, the Pennsylvania Public Utility Commission (PUC) must determine whether the proposed acquisition is in the public interest before the sale can move forward. As the PUC review proceeds through the court process, the parties have proposed a joint settlement for the transaction that is subject to PUC approval.
Timeline of Events
The story began in 2022, when ICVWA’s Board of Directors and representatives from Saltlick and Springfield Townships started weighing the future of the water system. Those early talks led to a major decision in 2025, when Pennsylvania American Water Company (PAWC) and ICVWA’s Board signed an Asset Purchase Agreement setting the basic terms of a $32.8 million sale.
That spring, the deal moved through public review and local approvals. Public input hearings were held in both townships on March 27, 2025. Saltlick Township approved the agreement on April 1 and May 13, while Springfield Township approved it on April 1 and April 29. On June 13, the sale landed on the Pennsylvania Public Utility Commission’s docket as Case A-2025-3055741, and PAWC formally submitted its application on November 3.
The review intensified in 2026. PAWC filed an amended application on January 13, and the PUC conditionally accepted it on March 3. Administrative Law Judges held public input hearings at the Saltlick Township Municipal Building on June 15, followed by a telephonic evidentiary hearing on June 17. Then, on July 8, PAWC filed a Joint Petition for Approval of Settlement. Most recently, on July 28, 2026, the Administrative Law Judges issued a decision, recommending that the PUC approve of the settlement’s terms.
The sale still isn’t final. The PUC must approve that settlement, which reflects input from PAWC, ICVWA, the Office of Consumer Advocate, and the Office of Small Business Advocate, before the acquisition can move forward. There is a statutory deadline of October 28, 2026. According to the ALJ’s Recommended Decision, the PUC’s “last reasonable Public Meeting before the end of the six-month statutory deadline is October 1, 2026.” Pg. 1.
What concerns have been raised?
During public hearings, residents expressed concerns about:
- Higher water bills
- Losing local control of the water system
- Need for water line extensions in unserved areas
- What the sale money is going toward
- Increased costs for ICVWA base associated with PAWC’s acquisition of future utilities
These comments became part of the record that the PUC will consider before making its decision. Joint Petition, pg. 19–20.
What’s included in the proposed settlement?
Rates
In April of 2026, customers received a letter discussing potential increases to their water bill – some increases up to 100%, if the cost of acquisition were left to ICVWA customers alone. However, with the settlement, residents will get a new mailer: this mailer will explain financial assistance programs, along with an acknowledgement that “rates will not be increasing at this time.” Upon close, rates will be consistent with those in Appendix A-12. Here is an excerpt from that document:
However, PAWC’s first rate case will seek an increase to “Rate Zone 1”, which is closer to what other customers across the state are paying. During this case, PAWC has the ability to ask for more money, including for certain attorney fees and other costs. Though, other parties to the settlement, including the Office of Consumer Advocate, do not waive their right to challenge rate increase requests at that time. All provisions remain subject to PUC approval.
Fair Market Value and Infrastructure Costs
In Pennsylvania, when a private company buys a public water system, Section 1329 controls how the buyer and seller figure out a fair price. Under this law, the utility’s “Fair Market Value (FMV)” is calculated as the average of two different experts’ appraisals. The appraisals have to be conducted a certain way under the law. Here, in this case, the parties agreed to allow PAWC to use $32,800,000 to calculate future customer water/wastewater bills.
After buying a utility like ICVWA, PAWC may spend money to repair, fix, or replace certain parts of the water system’s infrastructure. In Pennsylvania, there are laws controlling how and when PAWC may recoup those costs. When PAWC recovers those costs from customers, it is known as a “Distribution System Improvement Charge (DSIC).”
In the settlement, the parties agree that PAWC cannot pass off these infrastructure charges to its existing customers around the state, until PAWC meets certain requirements. First, PAWC has to submit a “Long-Term Infrastructure Improvement Plan”, explaining how they will fit new projects into their plan to complete existing projects in other places.
In the meantime, PAWC cannot recoup those costs it spends on upgrading the new system’s infrastructure. The settlement agrees to “deferred depreciation”, which allows PAWC to pause tracking these costs until it can legally adjust customers’ rates.
Water Line Extensions
If approved, the settlement would require that within 15 months of closing, PAWC will conduct a feasibility study prior to submission. PAWC will share draft findings and recommendations with local officials and stakeholders, meeting for feedback. PAWC commits to working with Saltlick and Springfield Townships in this regard. Additionally, PAWC plans to invest approximately $10.1 million in the water system during the first five years after the purchase. The planned work includes: upgrading treatment facilities; replacing aging water mains; improving water quality and system reliability; updating equipment and security; and meeting state and federal drinking water requirements. Joint Petition, pp. 17–18.
Customer Assistance
According to the settlement, PAWC will send out a Welcome Letter within 30 days of closing. In this Welcome Letter, customers will receive information about financial assistance programs. The Letter will also include contact information for the Office of Consumer Advocate and the Office of Small Business Advocate. These are state agencies whose purpose is to assist customers and small businesses with issues related to utilities. For two years after closing, PAWC will track the number of ICVWA’s customers that are eligible for or already enrolled in the Customer Assistance Program. Every six months, PAWC will present this information totheir Customer Assistance Advisory Group.
If the settlement is approved, the agreement also outlines an additional $20,000 per year for five years for hardship assistance.
Current ICVWA Employees
The settlement says Pennsylvania-American Water plans to offer employment to the Authority’s operating employees, subject to PAWC’s existing employment policies. Joint Petition, p. 17.
What happens next?
The Pennsylvania Public Utility Commission will decide whether to approve the settlement. If approved by all parties, PAWC will acquire all assets, contracts, and service rights owned by ICVWA. As a Section 1329 proceeding, the Pennsylvania Public Utility Commission (PUC) has a strict statutory deadline of six months to issue a Final Order with its decision.
As noted above, the last PUC meeting before the six-month statutory deadline falls on October 1, 2026. There, a decision is likely to be made by the PUC on whether to approve, reject, or modify the terms of the proposed settlement.
If you would like to read the proposed Joint Settlement, the document is available here.