Essential Utilities And American Water Strike New Jersey Settlement With Every Party, Including Rate Counsel
The stipulation covers all parties in the New Jersey merger review and still needs approval from the state's utility board.
Essential Utilities, the holding company behind the Aqua water and Peoples gas brands, and American Water Works filed a settlement with every party in New Jersey's review of their proposed merger, including the regulator's own staff and the state's Division of Rate Counsel. The stipulation was filed Monday and disclosed in an 8-K on Thursday.
Everyone at the table signed
American Water, Essential Utilities and certain affiliates filed the stipulation of settlement on November 2 in the proceeding before the New Jersey Board of Public Utilities. It was entered into with all parties, among them the board's staff and the Division of Rate Counsel, according to the filing.
The settlement was posted to the board's website as of November 5. It is still subject to review and approval by the board itself.
The deal behind the review
Under the merger agreement dated October 26, 2025, American Water's merger subsidiary, Alpha Merger Sub, would combine into Essential Utilities. Essential would survive as a wholly owned subsidiary of American Water.
Essential's utilities serve an estimated 5.5 million people across nine states, according to its annual report for 2025, including Pennsylvania, Ohio, Texas, Illinois and New Jersey. Its Peoples subsidiaries supply natural gas to approximately 747,000 customers, and Aqua Pennsylvania accounted for about 57% of the regulated water segment's operating revenues in 2025.
Path to a first-quarter 2027 close
Essential management said on its third-quarter earnings call that it expects the merger to close by the end of the first quarter of 2027, with approvals already in hand from Kentucky, Ohio and Virginia.
New Jersey is another state approval on that route, and the settlement leaves the board's vote as the remaining step in that proceeding.
The New Jersey Board of Public Utilities must now rule on the settlement before the companies can clear the state.
Sources
- 8-K Filing — Essential Utilities, Inc. (WTRG) — SEC EDGAR
- Essential Utilities Earnings: American Water Merger on Track for First-Quarter Close | Morningstar — morningstar.com
- Essential expects American Water merger close by end of Q1 2027 while targeting $8.7B five-year capex (NYSE:WTRG) — seekingalpha.com
