For more than 100 years, Aqua America operated almost exclusively in the suburbs of Philadelphia, where it was founded in 1886. In 1968, a holding company was formed, and in the early 1990s the company began an aggressive growth-by-acquisition strategy. In 2004, the parent corporation, still based in Bryn Mawr, Pa., changed its name from Philadelphia Suburban Corp. to Aqua America to announce its arrival on the national stage. To date, the company’s operations remain concentrated in Pennsylvania, with about half of its customers and more than half of its revenues coming from the state.
Aqua America focuses on buying water systems and hiking water prices. It typically purchases small water and sewer systems in areas near its existing network. In addition to owning systems, the company operates a handful of local government-owned systems, but it uses those deals as a way to build its reputation and to get a foot in the door on a possible acquisition of the systems. After taking over and building out its systems, the company seeks to increase water rates. The ability to hike consumer bills is the key to its earnings. On top of regular rate increases, the company pursues state approval to implement distribution system improvement charges to increase revenue and speed up returns.