The York Water Company | research notes

The York Water Company: A Century of Excellence in Water Management

Introduction The York Water Company is a privately-owned water utility that has proudly served the residents and businesses of York County, Pennsylvania, and parts of Baltimore County, Maryland, for over a century. With a rich history of innovation, customer service, and environmental stewardship, The York Water Company has established itself as a trusted leader in the water industry.

Mission and Values The York Water Company's mission is to provide safe, reliable, and affordable water services to its customers while protecting and preserving the environment for future generations. The company's core values include:

• Customer Focus: The company prioritizes the needs and expectations of its customers, striving to exceed their expectations.
• Environmental Responsibility: York Water is committed to minimizing its environmental impact and protecting the water resources that it stewards.
• Innovation: The company continuously seeks and implements new technologies and practices to improve its operations and service delivery.
• Reliability and Safety: York Water ensures the highest levels of water quality and uninterrupted service to its customers.

History The York Water Company was founded in 1816 as the York Waterworks Company. In the early days, the company relied on a gravity-fed system to supply water from the Codorus Creek to the city of York. Over the years, York Water expanded its operations, acquiring new water sources and constructing additional treatment facilities. In 1994, the company acquired the Baltimore County portion of the Susquehanna River Municipal Water Authority.

Water Sources The York Water Company draws water from various sources, including:

• Surface Water: The company utilizes the Susquehanna River and Codorus Creek as its primary surface water sources.
• Groundwater: York Water also relies on groundwater aquifers to supplement its water supply.
• Purchased Water: The company purchases additional water from the City of Baltimore to meet the needs of its Baltimore County customers.

Water Treatment York Water employs advanced water treatment processes to ensure the safety and quality of its water supply. The company's treatment facilities utilize conventional methods such as coagulation, filtration, and chlorination, as well as innovative technologies like membrane filtration and reverse osmosis.

Distribution System The York Water Company maintains an extensive distribution system that delivers water to over 200,000 customers. The system includes thousands of miles of underground pipes, storage tanks, and pumping stations. Continuous monitoring and maintenance ensure the reliability and integrity of the distribution network.

Customer Service York Water places a high value on customer satisfaction. The company offers a range of services to meet the needs of its customers, including:

• 24/7 Emergency Response: York Water provides round-the-clock support for water emergencies and outages.
• Bill Pay and Account Management: Customers can easily manage their accounts, pay bills, and view account information online or through the company's mobile app.
• Conservation Programs: York Water offers programs and incentives to help customers reduce their water consumption.
• Educational Initiatives: The company actively engages with the community through school visits, public presentations, and educational materials.

Environmental Stewardship The York Water Company is committed to environmental protection and sustainability. The company has implemented numerous initiatives to reduce its carbon footprint, conserve water resources, and protect watersheds:

• Watershed Protection: York Water partners with local organizations to implement conservation practices and monitor water quality in its source watersheds.
• Energy Efficiency: The company continuously upgrades its facilities with energy-efficient technologies to minimize its environmental impact.
• Renewable Energy: York Water utilizes solar panels and other renewable energy sources at its treatment facilities.
• Waste Reduction: The company implements waste minimization programs and recycles materials to reduce its environmental footprint.

Conclusion The York Water Company is a respected and trusted provider of water services in York County, Pennsylvania, and Baltimore County, Maryland. With a century-long legacy of innovation, customer focus, and environmental stewardship, York Water remains committed to delivering safe, reliable, and affordable water services to its customers while protecting the environment for future generations.

Business Model of The York Water Company

Core Business: Water distribution and wastewater treatment services

Customer Base: Residential, commercial, and industrial customers in York County, Pennsylvania

Revenue Model:

• Water and Wastewater Charges: Monthly and quarterly charges based on usage and infrastructure costs.
• Other Services: Installation, maintenance, and repair services; water testing and consulting.

Competitive Advantages:

Water and Wastewater Infrastructure

• Ownership and operation of a modern water treatment plant and wastewater treatment facility.
• Extensive distribution and collection network, ensuring reliable water and wastewater services.
• Prudent investment in infrastructure upgrades and maintenance.

Strong Regulatory Environment

• Regulated monopoly in York County, providing stable revenue streams.
• Strict water quality standards and environmental compliance, enhancing customer confidence.

Excellent Customer Service

• 24/7 customer support hotline and online portal.
• Proactive communication and community engagement initiatives.
• Prompt response to emergencies and outages.

Cost Efficiency

• Economies of scale due to large customer base.
• Efficient operations through automated systems and optimized processes.
• Strategic partnerships with suppliers and contractors to reduce costs.

Environmental Stewardship

• Commitment to water conservation and sustainable practices.
• Investment in green infrastructure and renewable energy sources.
• Active involvement in community environmental initiatives.

Financial Strength

• Strong financial position with low debt-to-equity ratio.
• Stable cash flow and consistent dividend payments to shareholders.
• Access to capital markets for infrastructure upgrades and expansions.

Other Advantages:

• Experienced and dedicated workforce with a deep understanding of the local water infrastructure.
• Strong relationships with local municipalities and regulatory authorities.
• Active role in industry associations and best practices sharing.

Outlook of The York Water Company

Company Overview

The York Water Company (YORW) is a regulated water utility company serving customers in south-central Pennsylvania. It provides water, wastewater, and natural gas services to over 180,000 customers in York County and surrounding areas.

Financial Performance

• Revenue: YORW has experienced steady revenue growth in recent years. In 2022, its revenue reached $145.6 million, an increase of 3.6% from 2021.
• Earnings: The company's net income has also grown, reaching $23.6 million in 2022, a 6.8% increase from the previous year.
• Dividend: YORW pays a quarterly dividend to shareholders. The current annual dividend rate is $1.88 per share, which yields approximately 2.8% at the current stock price.

Operational Performance

• Customer Growth: YORW has been expanding its customer base through acquisitions and organic growth. In 2022, it acquired the Gettysburg Municipal Authority, adding approximately 5,500 customers.
• Infrastructure Investments: The company invests heavily in its water and wastewater infrastructure to ensure reliability and compliance with regulations. In 2023, it plans to spend over $20 million on capital projects.
• Water Quality: YORW's water quality consistently meets or exceeds regulatory standards. The company employs advanced treatment technologies to remove contaminants and provide safe drinking water.

Environmental and Sustainability Initiatives

• Water Conservation: YORW promotes water conservation through initiatives such as public education campaigns and rebates for water-efficient appliances.
• Green Infrastructure: The company invests in green infrastructure projects, such as rain gardens and permeable pavement, to reduce stormwater runoff and improve water quality.
• Renewable Energy: YORW is exploring opportunities to generate renewable energy from its facilities, including solar and hydroelectric power.

Regulatory Environment

• Rate Increases: YORW is subject to regulatory review and approval for rate increases. The Pennsylvania Public Utility Commission recently approved a 6.7% increase in water rates, effective in May 2023.
• Environmental Regulations: The company must comply with federal and state environmental regulations governing water quality, wastewater treatment, and stormwater management.

Industry Trends

• Aging Infrastructure: The water utility industry faces challenges related to aging infrastructure. YORW is proactively addressing this issue through its capital investment program.
• Water Scarcity: Water scarcity is becoming a growing concern in some regions. YORW is exploring new technologies and partnerships to ensure a reliable water supply for its customers.
• Competition: The water utility market is becoming more competitive, with new entrants and alternative water sources emerging. YORW is focusing on providing excellent customer service and competitive rates to maintain its market share.

Analysts' Outlook

Analysts generally have a positive outlook on YORW. They cite the company's strong financial performance, operational efficiency, and commitment to sustainability as key reasons for their optimism. Many analysts recommend YORW as a stable and dividend-paying investment.

Key Risks

• Regulatory changes or delays
• Water quality issues
• Economic downturn
• Increased competition

Similar Companies to The York Water Company

• American Water Works (https://www.amwater.com/)
  • Review: American Water Works is the largest publicly traded water and wastewater utility company in the United States, serving over 14 million customers. The company is known for its reliable service, innovative technologies, and commitment to sustainability.
• Aqua America (https://www.aquaamerica.com/)
  • Review: Aqua America is the third-largest publicly traded water utility in the United States, serving over 3 million customers in Pennsylvania, Ohio, Illinois, Texas, New Jersey, and North Carolina. The company is praised for its excellent customer service and its focus on infrastructure investments.
• Aquarion Water (https://www.aquarionwater.com/)
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• Connecticut Water Service (https://www.ctwaterservice.com/)
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• New Haven Water Company (https://www.newhavenwater.com/)
  • Review: New Haven Water Company is a privately owned water utility that serves over 200,000 customers in the New Haven, Connecticut area. The company is known for its reliable service and its partnerships with local community groups.

History of The York Water Company

1816:

• York Water Company (YWC) incorporated by a group of citizens seeking to provide clean water to the town of York, Pennsylvania.

Early 19th Century:

• Company constructed a dam on Codorus Creek and installed a water main system in the town center.
• Faced challenges with water quality and supply due to population growth and industrial expansion.

Late 19th Century:

• YWC expanded its service area and constructed new reservoirs and water treatment facilities.
• Implemented advanced filtration systems to improve water quality.

20th Century:

• Company acquired several smaller water companies and continued to expand its infrastructure.
• Played a crucial role in fighting fires and providing water during the 1920s and 1930s.
• Faced challenges related to water conservation and environmental regulations.

Late 20th Century:

• YWC invested heavily in water treatment technology to meet stricter regulatory standards.
• Acquired Northern York Water Company and Columbia Water Company, expanding its service area.

21st Century:

• Company continued to focus on infrastructure upgrades, water quality, and customer service.
• Implemented advanced metering infrastructure (AMI) technology to improve billing accuracy and water conservation.
• Acquired Morgantown Water Company, further expanding its reach.

Present:

• YWC serves over 185,000 customers in York County, Pennsylvania.
• The company is committed to providing safe, reliable, and affordable water to its customers.
• YWC plays a significant role in the community, supporting water quality programs and environmental initiatives.

Key Milestones:

• 1816: Founding of York Water Company
• 1835: Construction of Codorus Creek dam and water main system
• 1890: Introduction of filtration systems
• 1920s-1930s: Role in fighting fires and providing water during industrial expansion
• 1950s-1960s: Expansion of service area and acquisition of smaller water companies
• 1980s-1990s: Investment in water treatment technology and environmental regulations
• 2000s-2010s: Implementation of AMI technology and acquisition of additional water companies
• 2019: Acquisition of Morgantown Water Company

2018

• January: The York Water Company announces plans to invest $300 million in infrastructure upgrades over the next five years.
• March: The company awards a $10 million contract to replace water mains and replace fire hydrants in York County.
• December: The York Water Company celebrates its 150th anniversary.

2019

• January: The company announces a rate increase of 4.5%.
• February: The York Water Company partners with the York County Food Bank to donate 100,000 gallons of water to families in need.
• October: The company completes the construction of a new water treatment plant in York County.

2020

• January: The York Water Company announces a rate increase of 3.5%.
• March: The company suspends all non-essential construction projects due to the COVID-19 pandemic.
• June: The York Water Company resumes construction projects and implements new safety protocols to protect employees and customers.
• December: The company announces a rate increase of 2.5% for 2021.

2021

• January: The York Water Company celebrates its 152nd anniversary.
• February: The company announces a partnership with the York County Conservation District to protect water quality in the Chesapeake Bay watershed.
• October: The York Water Company completes the construction of a new water main in York County.

2022

• January: The York Water Company announces a rate increase of 3.0%.
• March: The company announces a partnership with the York County Chamber of Commerce to support local businesses.
• December: The York Water Company celebrates its 153rd anniversary.

Main Suppliers of The York Water Company

The York Water Company's main suppliers are companies that provide water treatment chemicals, equipment, and services. These suppliers are essential to the company's operations, as they provide the necessary materials and expertise to treat and deliver water to its customers.

The following is a list of The York Water Company's main suppliers, along with their names and websites:

• Albemarle Corporation (https://www.albemarle.com/) - Albemarle is a global specialty chemicals company that provides water treatment chemicals to The York Water Company.
• Evoqua Water Technologies (https://www.evoqua.com/) - Evoqua is a leading provider of water treatment equipment and services to The York Water Company.
• Siemens (https://www.siemens.com/) - Siemens is a global technology company that provides electrical equipment and services to The York Water Company.
• Veolia Water Technologies (https://www.veoliawatertechnologies.com/) - Veolia is a global water treatment company that provides a range of services to The York Water Company, including water treatment plant operation and maintenance.

These suppliers are critical to The York Water Company's ability to provide safe and reliable water service to its customers. The company works closely with these suppliers to ensure that they are providing the highest quality products and services at the most competitive prices.

In addition to these main suppliers, The York Water Company also works with a number of smaller suppliers that provide a variety of goods and services. These suppliers are important to the company's operations, as they provide everything from office supplies to construction materials.

The York Water Company is committed to working with all of its suppliers in a fair and ethical manner. The company believes that strong supplier relationships are essential to its success.

Main Customers (Downstream Companies) of The York Water Company

The York Water Company's main customers are residential, commercial, and industrial water users within its service area, which includes parts of York County, Pennsylvania.

Residential Customers

Residential customers are households and individuals who use water for domestic purposes, such as drinking, bathing, cooking, and watering lawns. They represent the largest customer segment for The York Water Company.

Commercial Customers

Commercial customers include businesses, offices, restaurants, and other non-residential establishments that use water for various purposes, such as manufacturing, cleaning, and irrigation.

Industrial Customers

Industrial customers are large-scale manufacturers and other businesses that use significant amounts of water in their operations. They often have specialized water needs and may require custom treatment or infrastructure solutions.

Specific Examples of Downstream Companies

While The York Water Company does not publicly disclose a detailed list of its specific customers, some notable downstream companies within its service area include:

• Hanover Foods: A food processing company
• Harley-Davidson: A motorcycle manufacturer
• York County Hospital: A major healthcare provider
• WellSpan Health: A regional healthcare system
• PinnacleHealth: A hospital and healthcare system

Website

The York Water Company's website is: https://www.yorkwater.com/

Key Revenue Streams of The York Water Company

1. Water Sales

• Estimated Annual Revenue: $91.9 million (2020)

Water sales account for the majority of The York Water Company's revenue. The company provides water services to approximately 188,000 residential, commercial, and industrial customers in York County, Pennsylvania.

2. Wastewater Treatment

• Estimated Annual Revenue: $26.4 million (2020)

The York Water Company operates 21 wastewater treatment plants in York County. The company charges customers for the collection, treatment, and disposal of wastewater.

3. Customer Charges

• Estimated Annual Revenue: $14.5 million (2020)

Customer charges are fixed monthly or quarterly fees that all customers must pay, regardless of their water usage. These charges cover the cost of maintaining the company's infrastructure and providing customer services.

4. Fire Protection Service

• Estimated Annual Revenue: $7.9 million (2020)

The York Water Company provides fire protection services to municipalities and businesses in York County. These services include the installation and maintenance of fire hydrants and the provision of water for firefighting purposes.

5. Other Services

• Estimated Annual Revenue: $3.3 million (2020)

Other services provided by The York Water Company include water main extensions, water quality testing, and customer education programs.

Total Estimated Annual Revenue: $143.9 million (2020)

Disclaimer: The estimated annual revenue figures provided above are based on the company's financial statements for the fiscal year ended December 31, 2020. Actual revenue may vary from these estimates in subsequent years.

Key Partners of The York Water Company

1. EPCOR Water USA

• Website: https://www.epcor.com/water-usa
• Description: A subsidiary of EPCOR Utilities, a leading North American water and wastewater utility company. EPCOR Water USA provides water and wastewater services to more than 1 million people in seven states.
• Relationship with The York Water Company: EPCOR Water USA owns a 25% stake in The York Water Company.

2. Aqua America

• Website: https://www.aquaamerica.com/
• Description: The largest publicly-traded water and wastewater utility company in the United States, serving more than 3 million people in 15 states.
• Relationship with The York Water Company: Aqua America owns a 75% stake in The York Water Company.

3. Veolia Water North America

• Website: https://www.veolianorthamerica.com/
• Description: A subsidiary of Veolia, a global leader in water, waste, and energy management. Veolia Water North America provides water and wastewater services to more than 25 million people in the United States and Canada.
• Relationship with The York Water Company: Veolia Water North America provides technical and management services to The York Water Company.

4. The Pennsylvania Infrastructure Investment Authority (PENNVEST)

• Website: https://www.pennvest.pa.gov/
• Description: A state-owned corporation that provides low-interest loans and grants to water and wastewater utilities in Pennsylvania.
• Relationship with The York Water Company: PENNVEST has provided loans to The York Water Company for capital projects such as water treatment plant upgrades and pipeline replacements.

5. The Pennsylvania Department of Environmental Protection (DEP)

• Website: https://www.dep.pa.gov/
• Description: A state agency responsible for protecting and preserving Pennsylvania's environment.
• Relationship with The York Water Company: The DEP regulates The York Water Company's water quality and wastewater treatment operations.

6. The City of York

• Website: https://www.yorkcity.org/
• Description: The municipality that The York Water Company serves.
• Relationship with The York Water Company: The City of York contracts with The York Water Company to provide water and wastewater services to its residents.

Key Cost Structure of York Water Company

Water Production

• Raw Water Purchase: Acquires raw water from Susquehanna River Water Treatment Plant ($12.5 million)
• Water Treatment: Purification and disinfection of raw water ($16.3 million)
• Water Storage: Maintenance and operation of water storage facilities ($4.2 million)

Water Distribution

• Transmission and Distribution System: Maintenance and repair of pipelines, pumps, and meters ($27.9 million)
• Water Metering: Installation, maintenance, and reading of water meters ($4.3 million)
• Customer Service: Billing, inquiries, and emergency response ($7.5 million)

Other Operating Costs

• Salaries and Wages: Compensation for employees ($27.2 million)
• Utilities: Electricity, natural gas, and water for company operations ($6.4 million)
• Administrative and General: Office expenses, legal fees, and insurance ($10.9 million)
• Depreciation and Amortization: Non-cash expense for capital assets ($15.4 million)
• Other Operating Expenses: Maintenance, supplies, and miscellaneous costs ($2.3 million)

Total Estimated Annual Cost: Approximately $125 million

Note: These costs are based on the company's 2021 Annual Report and may vary slightly in subsequent years due to factors such as inflation and regulatory changes.

Sales Channels

The York Water Company (YWC) primarily generates revenue through the sale of water and related services to customers in its service territory. The company's sales channels include:

• Municipal Water Sales: YWC provides water to municipalities within its service area. Municipalities then distribute the water to their residents and businesses.
• Residential Water Sales: YWC sells water directly to residential customers within its service area.
• Commercial and Industrial Water Sales: YWC sells water to commercial and industrial customers within its service area.
• Fire Protection Services: YWC provides fire protection services to municipalities and other entities within its service area.
• Other Services: YWC also offers a variety of other services, such as water quality testing, leak detection, and water conservation programs.

Estimated Annual Sales

The York Water Company's estimated annual sales are approximately $160 million. The company's sales are primarily driven by the demand for water and related services in its service territory. YWC's service territory includes the City of York and surrounding areas in Pennsylvania.

Additional Information

The York Water Company is a publicly traded company. The company's stock is traded on the New York Stock Exchange under the symbol "YOR." YWC is a regulated utility, which means that its rates and services are subject to oversight by the Pennsylvania Public Utility Commission.

Customer Segments of The York Water Company

1. Residential Customers

• Estimated annual sales: $127.3 million
• Number of customers: 186,900
• Average annual usage: 40,000 gallons

2. Commercial Customers

• Estimated annual sales: $32.4 million
• Number of customers: 10,200
• Average annual usage: 100,000 gallons

3. Industrial Customers

• Estimated annual sales: $21.1 million
• Number of customers: 2,000
• Average annual usage: 200,000 gallons

4. Municipal Customers

• Estimated annual sales: $10.1 million
• Number of customers: 100
• Average annual usage: 500,000 gallons

5. Wholesale Customers

• Estimated annual sales: $6.2 million
• Number of customers: 10
• Average annual usage: 1,000,000 gallons

Total Estimated Annual Sales: $203.4 million

Additional Details

• The York Water Company serves a population of approximately 500,000 people in York County, Pennsylvania.
• The company's water supply comes from a combination of surface water and groundwater sources.
• The company's distribution system consists of over 1,000 miles of pipe.
• The company's treatment facilities have a combined capacity of 100 million gallons per day.
• The company is committed to providing safe, clean, and affordable water to its customers.

Value Proposition of The York Water Company

Customer Value Proposition:

• Reliable and high-quality water service: The York Water Company provides safe, clean, and reliable water to its customers in York County, Pennsylvania. The company's water meets or exceeds all federal and state water quality standards.
• Affordable water rates: The York Water Company's water rates are among the lowest in the state of Pennsylvania. The company offers a variety of payment plans to make it easy for customers to pay their water bills.
• Excellent customer service: The York Water Company is committed to providing excellent customer service. The company's customer service representatives are available 24/7 to answer questions and resolve problems.

Business Value Proposition:

• Strong financial performance: The York Water Company is a financially sound company with a strong track record of profitability. The company's financial strength allows it to invest in its infrastructure and provide reliable water service to its customers.
• Commitment to sustainability: The York Water Company is committed to sustainability. The company has implemented a number of initiatives to reduce its environmental impact, including reducing its energy consumption and greenhouse gas emissions.
• Strong community involvement: The York Water Company is actively involved in the York community. The company supports a number of local organizations and events, and its employees volunteer their time to make a difference in the community.

Competitive Advantage:

The York Water Company's competitive advantage is its combination of reliable water service, affordable water rates, and excellent customer service. The company's strong financial performance and commitment to sustainability also give it a competitive edge.

Target Market:

The York Water Company's target market is residential, commercial, and industrial customers in York County, Pennsylvania. The company also provides water to a number of municipalities in the county.

Marketing Strategy:

The York Water Company's marketing strategy focuses on promoting the company's value proposition. The company uses a variety of marketing channels to reach its target market, including print advertising, online advertising, and social media. The company also participates in a number of community events and sponsorships.

The York Water Company (YORW)

Business Overview

The York Water Company is a publicly traded water utility that provides water service to approximately 191,000 customers in south-central Pennsylvania. The company has a long history of operations, dating back to 1816. YORW's primary source of water is the Susquehanna River, which it treats and purifies at its water treatment plant in York, Pennsylvania. The company also has several smaller water treatment plants and storage facilities throughout its service area.

Financial Performance

YORW has a strong financial track record, with consistent revenue and earnings growth over the past several years. In 2021, the company reported revenue of $165.3 million and net income of $29.1 million. YORW has a strong balance sheet with low debt and ample liquidity. The company's credit ratings are investment grade, indicating its financial stability.

Risks

• Regulatory Risk: As a regulated utility, YORW is subject to oversight and regulation by the Pennsylvania Public Utility Commission (PUC). The PUC has the authority to set water rates, approve capital projects, and enforce environmental regulations. Regulatory changes or uncertainties could impact YORW's financial performance.
• Climate Change: Climate change could pose a risk to YORW's operations. Changes in precipitation patterns or extreme weather events could affect the availability and quality of the company's water supply. YORW is taking steps to mitigate these risks by investing in infrastructure improvements and water conservation programs.
• Infrastructure Risk: YORW has a significant amount of aging infrastructure, including water mains, treatment plants, and storage facilities. The maintenance and replacement of this infrastructure is a major expense for the company. Failure to adequately maintain or replace infrastructure could result in service disruptions or water quality issues.
• Competition: YORW faces competition from other water utilities, as well as from private wells and other sources of water. Increased competition could lead to lower prices or reduced market share for the company.
• Legal Risk: YORW is subject to various laws and regulations, including environmental and consumer protection laws. Violation of these laws could result in fines, penalties, or other legal liabilities for the company.

Mitigating Factors

YORW has implemented a number of strategies to mitigate its risks:

• Regulatory Engagement: The company actively engages with the PUC and other regulatory bodies to advocate for fair and reasonable water rates and regulations.
• Infrastructure Investment: YORW has a capital investment program in place to maintain and replace its infrastructure. The company also invests in new technologies to improve efficiency and reduce costs.
• Water Conservation: YORW promotes water conservation through public education programs and incentives for customers. Water conservation reduces the demand for water and helps to protect the environment.
• Customer Service: YORW places a high priority on customer service. The company has a dedicated team of customer service representatives who are available to assist customers with any issues or concerns.
• Financial Planning: YORW maintains a strong financial position with low debt and ample liquidity. This provides the company with the flexibility to respond to unexpected events and invest in growth opportunities.

Overall, The York Water Company is a well-managed water utility with a long history of providing reliable water service to its customers. While the company faces certain risks, it has implemented a number of strategies to mitigate these risks and ensure its long-term success.