14.
Transaction with the City of Nashua
On January 25, 2012, in full settlement of an ongoing Eminent Domain lawsuit filed by the
City of Nashua (“City”) and with the approval of the NHPUC, the City acquired all of the
outstanding shares of the Company and, thereby, indirect acquisition of its regulated
subsidiaries. The total amount of the acquisition was $150.6 million (“Acquisition Price”) of
which $138.4 million was for the purchase of the outstanding shares, $5.0 million for the
establishment of a Rate Stabilization Fund, $2.6 million for legal and due diligence costs, $2.3
million for severance costs, $1.3 million for underwriting fees, and $1.0 million for bond
discount and issue costs. The entire purchase of $150.6 million was funded by General
Obligation Bonds (“Bonds”) issued by the City of Nashua. The Company is not a party to the
Bonds and has not guaranteed nor is obligated in any manner for the repayment of the Bonds.
The Company remains an independent corporation with an independent Board of Directors,
with the City of Nashua as its sole stockholder.
Pennichuck Water, Pennichuck East, PAC, Service Corporation, and Southwood will continue
as subsidiaries of Pennichuck Corporation and Pennichuck Water, Pennichuck East and PAC
will continue as regulated companies under the jurisdiction of the NHPUC. The terms of the
merger and the requisite accounting and rate-setting mechanisms were agreed to in the
NHPUC Order No. 25,292 (“PUC Order”) dated November 23, 2011.
Transactions with Related Party — City of Nashua
The Company issued a promissory note to the City of Nashua in the amount of approximately
$120 million to be repaid over a thirty (30) year period with monthly payments of
approximately $707,000, including interest at 5.75%. The Company recorded an additional
amount of approximately $30.6 million as contributed capital. The remaining outstanding
balance of the note payable to the City at December 31, 2021 and 2020 was approximately
$99.6 million and $102 million, respectively, as disclosed in Note 11 to these consolidated
financial statements. During 2021 and 2020, dividends of approximately $279,000 and
$279,000, respectively, were declared and paid to the City. The dividends paid to the City
during 2021 comprised approximately $279,000 of regular quarterly dividends declared and
paid; and no special dividend was declared or paid in 2021. The dividends paid to the City
during 2020 comprised approximately $279,000 of regular quarterly dividends declared and
paid; and no special dividend was declared or paid in 2020.
Additional ongoing transactions occur in the normal course of business, between the
Company and the City, related to municipal water usage, fire protection and sewer billing
support services, and property taxes related to real property owned by the Company within
the City of Nashua. For the years ended December 31, 2021 and 2020, respectively,
approximately $3.9 million and $3.4 million were paid to the Company by the City for
municipal water consumption, fire protection charges, and sewer billing support services.
Conversely, the Company paid property taxes to the City of Nashua of approximately $2.3
million for the year ended December 31, 2021, and approximately $2.7 million for the year
ended December 31, 2020.
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