-10-
bond issuance associated with these capital investments and the QCPAC surcharge will be
completed and funded. The Order will allow recoupment of the surcharge from all its customers
based on their actual bills incurred between April 1, 2021 and the final effective date of the
Order.
On February 11, 2021, Pennichuck East filed a petition with the NHPUC for a 4.08% surcharge
on all capital improvements completed and placed in service by Pennichuck East in 2020. The
Commission has not issued an Order approving this requested surcharge. When the Commission
issues the Order, the surcharge will become effective retroactively on a “service rendered basis”
back to a date on or around July 31, 2021, depending upon the timing for which PEU completes
its annual debt financing with CoBank, which is done each year to convert FALOC borrowings
used to fund capital projects for the previous year, to a term loan with repayment terms of up to
25 years. The Order will allow recoupment of the surcharge from all its customers based on their
actual bills incurred between this estimated July 31, 2021 date and the final effective date of the
Order.
Other Events
PFOA Contamination Issues
During 2016, the Company was significantly involved in assisting the New Hampshire
Department of Environmental Services (“NHDES”) in assessing and bringing remediation
solutions to bear, in light of the PFOA contamination issues discovered in the towns surrounding
the Saint Gobain Performance Plastics (“SGPP”) site in north Merrimack. This included self-
instituting comprehensive and regular testing of the Company’s water supplies and water
systems, not only in the area adjacent to this site, but taking and processing at least two sets of
tests at all water sources that the Company owns throughout the State. This was done in order to
detect if any levels of contamination existed in the water sources, to aid the NHDES in
completing their statewide assessment, and to allow the Company to respond with certainty to
any of its customers as to any detectable levels. With regards to the water supply systems
directly adjacent to or connected to the Merrimack Village District, the Company has been
taking periodic regularly scheduled samples since this contamination site was disclosed in March
of 2016. The results of these tests were that none of the Company’s water sources had detectable
levels exceeding EPA lifetime advisory levels, or the State’s emergency and impending
permanent standard detection levels.
Additionally, at the request of the NHDES, the Company was asked to enter into a contract with
SGPP for the design of the expansion of public water to residents in the northern portion of
Litchfield, where private wells had been contaminated, in some cases well above acceptable
levels. Based upon the results of that design work, the Company was then contracted by SGPP
to expand the public water system owned by the Company in Litchfield to approximately 400
property owners, including nearly 10 miles of new water mains and nearly 10 miles of new
service lines. The cost of the design work and the expansion of the water system has and is
being paid totally by SGPP and was contributed to the Company as Contributions in Aid of
Construction (CIAC), as assets to be owned by the Company, the Town or DOT (for pavement
restoration on town or State roads), or the residents (in the case of the service lines) going
forward.
