A trio of private companies asked Tuesday for state regulators to approve a sale that includes Mountain Water Co.
The parties making the request are the local water utility; its owner, a subsidiary of the Carlyle Group; and its proposed owner, a "newly created" corporation and subsidiary of Liberty Utilities.
They made their request in a joint application filed with the Montana Public Service Commission.
Liberty Utilities is owned by Algonquin Power and Utilities Corp. of Canada, and in September the Carlyle Group announced it had signed a proposed agreement to transfer its Western Water Holdings to Liberty. Western Water Holdings includes Mountain Water Co. and two California water companies.
The ownership of Mountain Water is currently under dispute. This spring, the city of Missoula took Mountain and Carlyle to court to force the global equity firm to sell the water utility to the city, and trial is set for March.
In the application, the parties address the condemnation case pending in Missoula County District Court.
"Importantly, Liberty Utilities' acquisition of Western Water Holdings is not contingent on the outcome of the pending condemnation proceeding brought against Mountain Water and Carlyle by the City of Missoula," reads the application. "... The change in control of the upstream entity should not be affected by the outcome of the condemnation case at the asset level regardless of who prevails in that litigation."
In the filing, Liberty Utilities notes it has $1.8 billion in regulated assets with just under 500,000 connections to utility customers. The companies argue the commission should approve the sale; the California regulatory agency also considers the transfer.
"The Commission should determine the merger ... satisfies the no-harm-to-consumers standard because the merger does not increase the risk that Mountain Water's customers will receive inadequate service or will receive service at rates that are not just and reasonable," reads the application.
The application notes the proposed agreement put the sale price for the three water companies at $327 million, including $250 million in cash and $77 million in debt.
Through the city communications director, Mayor John Engen declined to comment Tuesday because he had not read the document and had not consulted his attorneys. However, Engen earlier said he did not believe the parties had the ability to close on a sale given the pending court case.
“We are doing our best to stand in the way of the ability to close, by virtue of our interest in ownership," Engen said at the time. "We want to be fair to all parties, but we want to own it."
A Public Service Commission staff attorney could not immediately be reached for comment on the procedure that follows the application, including whether the agency would set a public hearing on the matter.