The judges reviewing the proposed American Water and Essential Utilities merger confirmed a settlement on August 28, but it's a non-unanimous one, meaning not everyone at the table agreed. Here's what that actually means if you get your water from Pennsylvania American Water.
What Actually Happened on August 28
On August 28, 2026, the Administrative Law Judges overseeing Pennsylvania's review of the proposed merger between American Water and Essential Utilities issued an interim order. It confirmed that American Water, Essential Utilities, and other parties in the case had worked out a settlement covering how the Pennsylvania Public Utility Commission should evaluate the deal. American Water disclosed the development in a filing with the Securities and Exchange Commission three days later, on August 31.
This is not the final word on the merger. The judges' order sends the settlement up the chain for the full five member Public Utility Commission to review. Commissioners can accept it as written, modify its terms, or reject pieces of it. Settlements like this typically still involve a comment period and a formal Commission vote before anything becomes binding on the companies.
The timing lines up with a merger that has been working through a long list of state regulators since it was first announced in October 2025. Pennsylvania is one of the two largest and most closely watched approvals left, alongside New Jersey, given how many customers both American Water and Essential Utilities' Aqua Pennsylvania subsidiary serve across the Commonwealth.
Why the Word 'Non-Unanimous' Is Doing a Lot of Work Here
Pennsylvania utility settlements generally come in two forms. A unanimous settlement means every party in the case, including the companies, the state's Office of Consumer Advocate, and any local intervenors, agreed to the same terms, and those tend to move through the Commission with relatively little friction. A non-unanimous settlement means at least one party either declined to sign or is still contesting parts of the deal.
That distinction matters because it signals real disagreement remains. Earlier this year, the state's Office of Consumer Advocate and the Pennsylvania Utility Law Project, representing the low income advocacy group CAUSE-PA, filed formal protests arguing the merger had not been shown to deliver the level of public benefit Pennsylvania law requires before regulators can approve a change in utility ownership. Their concerns centered on future rates and service quality for low and moderate income households.
A non-unanimous settlement gives the full Commission more room to attach its own conditions before final approval, things like temporary rate protections, service quality commitments, or expanded low income assistance requirements that go beyond what the two companies originally proposed. It also preserves the ability of any party unhappy with the eventual outcome to appeal to Commonwealth Court.
What American Water Has Already Promised Under Oath
Company attorneys have made specific commitments on the record during Pennsylvania's public input hearings on the merger. American Water's outside counsel testified that the transaction "will not change the rates in effect at the time of closing," and that none of the costs of assembling the deal, legal fees, advisory fees, or financing costs, will be billed to customers.
The company's broader pitch is that combining with Essential Utilities, the parent of Aqua Pennsylvania and Peoples Natural Gas, creates enough scale and operating efficiency to keep future rate increases smaller than they would otherwise be, while directing more capital toward replacing aging pipes across both companies' service territories.
It is worth separating that promise from Pennsylvania American Water's own rate case, which is an entirely separate proceeding decided months before this settlement news broke. The Commission already approved a $74.9 million annual revenue increase for that utility in July, with new rates that took effect August 13, 2026. That increase has nothing to do with the merger review.
What This Means If You Get Your Water From PA American Water
Nothing changes on your bill today. The merger has not closed, the settlement has not been formally approved by the full Commission, and even after approval the companies expect the deal to take until roughly the end of the first quarter of 2027 to actually close.
If you want a say, Pennsylvania's process allows written public comment even after a settlement is filed, and the docket covering this case stays open for customer input until the Commission issues a final order. You do not need a lawyer to submit a comment.
Whoever ends up owning the pipes feeding your house, the plumbing on your side of the meter stays your responsibility. It is worth having a licensed plumber check your water heater, main shutoff valve, and any exposed piping as the seasons change, regardless of what happens in Harrisburg. Plumbarama's team is available 24/7 across New Jersey and Pennsylvania for exactly that kind of inspection.
Figures per American Water's SEC filings and the companies' state regulatory approval announcements, 2026.
6 Things Pennsylvania Water Customers Should Know About the Merger Review
The headlines make this sound bigger and scarier than it is for your monthly bill right now. Here's what to actually keep in mind.
- The settlement isn't a done deal: It's a recommendation from Administrative Law Judges. The full Pennsylvania Public Utility Commission still has to review, and potentially revise, it before it becomes final.
- Non-unanimous means someone still disagrees: At least one party in the case has not signed off, which keeps the door open for the Commission to add conditions or for an appeal down the road.
- Your current rates weren't set by the merger: Pennsylvania American Water's rate case that took effect August 13, 2026 was decided through a completely separate proceeding months earlier.
- Consumer advocates are pushing back on your behalf: The Office of Consumer Advocate and a low income advocacy group have formally questioned whether the deal delivers enough public benefit to approve.
- New Jersey approval is still outstanding too: Both states Plumbarama serves have their own regulators reviewing this merger, and neither review is finished yet.
- A merger doesn't change who to call for a leak: Whichever corporate name ends up on your bill, a licensed local plumber is still your first call for anything on your side of the water meter.
Frequently asked questions
- Does the August 28 settlement mean the merger is approved in Pennsylvania?
- No. It means the Administrative Law Judges confirmed the companies reached a settlement framework, but the full Pennsylvania Public Utility Commission still needs to formally review and approve it before the merger can move forward in the state.
- Will my Pennsylvania American Water bill change because of this merger?
- Not based on anything announced so far. American Water's counsel has testified the deal will not change rates in effect at closing and that merger transaction costs will not be passed to customers. Any future rate change would still go through its own separate PUC rate case.
- Who opposed the settlement, and why?
- The Pennsylvania Office of Consumer Advocate and the Pennsylvania Utility Law Project, representing the group CAUSE-PA, have questioned whether the merger meets the public benefit standard Pennsylvania law requires, citing concerns about future rates and service for low and moderate income customers.
- When will the merger actually close?
- American Water and Essential Utilities expect the deal to close by the end of the first quarter of 2027, assuming they secure the remaining state approvals, including Pennsylvania and New Jersey, and satisfy other standard closing conditions.