McCarthy Engineering Associates, Inc.’s Utility Valuation Expert (UVE) registration was recently renewed by the Pennsylvania Public Utility Commission. McCarthy Engineering is one of four engineering consultants on the list and overall, one of twelve certified companies on the list.
Governor Tom Wolfe signed legislation, Act 12 of 2016, to help municipalities selling their aging water and wastewater system to private sector investor-owned entities. Under this legislation municipalities can engage the services of a registered Utility Valuation Expert to determine fair market value of their system. The program is voluntary but both buyer and seller must agree to use it. The program benefits both the municipality and the potential buyer by presenting a more accurate picture of a utility’s value than the traditional method. The buyer and seller each pick an independent Utility Valuation Expert who has six months to calculate an estimated value of the water system. The value takes into account factors such as: the value of the infrastructure itself, the system’s anticipated revenue and foreseeable costs such as repairs, maintenance or improvements required by law. The acquisition price is the average of the two consultants’ estimates unless the parties agree on a lower one.
In Pennsylvania, Act 12 of 2016 has helped municipally owned water and wastewater utilities as they have infrastructures that are in need of major repair or replacement and would require the municipalities to make extraordinary investments that would ultimately be negatively felt by their customers. Being evaluated by a registered Utility Valuation Expert and selling their systems to a larger investor-owned utility, means benefits to their end users, of safe, reliable service at reasonable rates.
As a Utility Valuation Expert McCarthy Engineering Associates can:
- Assist your municipal corporation or authority by determining a fair market value in compliance with the Uniform Standards of Professional Appraisal Practice, employing the cost, market, and income approaches.
- Provide technical assessment of the tangible assets to determine present value, depreciated value, and replacement cost.
- Provide expert testimony on behalf of any application through the Pennsylvania Public Utility Commission relative to the work that we perform.
“As a provider of engineering services to many municipalities, selling water and wastewater systems is always a serious consideration to address long-term budget and debt obligations. It is of the utmost importance for us to maintain our Utility Valuation Expert registration and help the municipalities we serve by fairly valuing their systems and protecting their assets,” said Jim McCarthy, McCarthy Engineering Associates, Inc. President & CEO.
For more information about the utility valuation process, please contact Jim McCarthy at 610.373.8001 or [email protected]
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