Philadelphia Suburban Acquires Four Pennsylvania Water Utilities.

Business Editors

BRYN MAWR, Pa.--(BUSINESS WIRE)--Dec. 21, 2000

Philadelphia Suburban Corporation (NYSE:PSC) today announced that it has acquired four Pennsylvania water utilities through a merger transaction valued at approximately $11 million including stock and the assumption of debt.

The transaction has been approved by the Pennsylvania Public Utility Commission. Three of the companies are located in northeastern Pennsylvania (Pocono area) and the other is located in northwestern Pennsylvania. Collectively, they serve 5,800 customers (more than 10,000 people).

The companies are:

1. Fawn Lake Forest Water Company, serving water and wastewater

to 2,900 customers in the Fawn Lake Forest and Woodloch

Springs developments located in Lackawaxen Township in

fast-growing Pike County near Lake Wallenpaupack in

northeastern Pennsylvania.

2. Northeastern Utilities, Inc., and its subsidiary Hawley Water

Company, serving approximately 900 water customers in the

Borough of Hawley and Palmyra Township, Wayne County.

3. Waymart Water Company, serving water to 400 customers and a

federal prison now under construction in the Borough of

Waymart and portions of Canaan Township in Wayne County in

northeastern Pennsylvania.

4. Western Utilities Inc., serving water to 1,600 customers in

Lake Latonka, Jackson and Cool Springs Townships in Mercer

County, adjacent to PSC's Consumer's Shenango Valley

operations in northwestern Pennsylvania.

"This merger creates four new subsidiaries under PSC and extends our operations in both the northeastern and northwestern quadrants of Pennsylvania," said PSC Chairman Nicholas DeBenedictis. These systems can be operated in conjunction with the Consumers Pennsylvania Roaring Creek and Shenango Valley operations. "We believe this expansion of service in northeastern and northwestern Pennsylvania will provide us with additional growth opportunities in and around the new areas of our service territory. Additionally, these areas will benefit from PSC's in-house water quality expertise, and our history of environmental compliance."

The acquisition of these four companies represent the 17th growth venture announced by PSC this year.

1. January 2000 - Consumers New Jersey Water Company was awarded

a three-year contract to provide meter reading, billing and

cash remittance services to the Winslow Township municipal

water system in Camden County which provides water and

wastewater services to approximately 30,000 residents.

2. April 2000 - PSW's wastewater division purchased the Twin

Hills wastewater system that serves approximately 750

residents in West Pikeland Township, Chester County.

3. May 2000 - PSW purchased the Fulmor Heights water system that

serves approximately 1,000 residents in Hatboro Borough,

Montgomery County.

4. May 2000 - PSC's Consumers Illinois subsidiary was awarded a

10-year contract with the city of Kankakee to provide billing

for municipal services including wastewater and solid waste

removal.

5. June 2000 - PSC's Consumers Ohio subsidiary merged with

Applegrove Water Company, which serves approximately 2,600

residents in Plain Township and the City of North Canton, both

in Stark County, Ohio.

6. August 2000 - PSW entered into 25-year bulk water sales

agreement with Liberty Electric Power, LLC (Liberty)--a

subsidiary of Columbia Electric Corporation-valued at $43

million. Liberty, is scheduled to begin startup operations at

the 568-megawatt gas-powered plant in the fall of 2001.

7. August 2000 - PSC's Consumers Ohio subsidiary acquired the

Summit County water system, serving approximately 4,200

residents in the City of Green.

8. August 2000 - PSW purchased the White Horse Village retirement

community water system that includes 500 residences and a

100-bed hospital in Edgmont Township, Delaware County.

9. August 2000 - PSC's Consumers Illinois subsidiary announced an

agreement of sale to purchase the Ivanhoe water and wastewater

systems, which provide water and wastewater service to

approximately 400 residents in the gated golf community in

Ivanhoe, Lake County.

10. August 2000 - PSW received approval from the Pennsylvania

Public Utility Commission to serve Honeybrook Township,

Chester County.

11. October 2000 - PSW's wastewater subsidiary--Little Washington

Wastewater Company--purchased the Plumsock at Willistown

wastewater system, which serves 120 residents.

12. October 2000 - PSW purchased the Chatwood water system, which

serves approximately 250 residents in West Goshen Township,

Chester County.

13. November 2000 - PSC announced that its Consumers Illinois

Water Company subsidiary had acquired the water and wastewater

collection system serving Calumet Gardens, a development of

approximately 100 residents in Crete Township, Will County.

14. November 2000 - PSW purchased a collective of three (referred

to as the West Chester Collective) community homeowner water

systems (Circle Avenue, Elizabeth Manor and Orchard's) that

serve 135 residents in West Goshen and Westtown Townships,

Chester County.

15. December 2000 - PSC's newly created Consumers North Carolina 

Water Company purchases MidSouth Utilities, Inc. of Sherrills

Ford, NC.--a public water and wastewater utility that

currently will serve approximately 1,000 residents in Iredell

County.

16. December 2000 - PSW purchased the assets of a 30-resident

homeowner water system (Linden Court), in West Whiteland

Township, and the water distribution system that serves three

industrial buildings on the former Keystone/MMB Helicopter

headquarters property in West Goshen Township. In addition,

PSW will provide water service to approximately 350 residents

in West Goshen Township and 50 residents in Westtown Township

through its Main Source program. These acquisitions are

referred to as the West Chester Collective II.

PSC is one of the nation's largest investor-owned water utilities serving nearly two million residents in Pennsylvania, Ohio, Illinois, New Jersey, Maine and North Carolina. PSC is a publicly-traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC" and has been committed to the preservation and improvement of the environment throughout its history, which spans more than 100 years.

Editors Note: This release contains certain forward-looking statements involving risks, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements.

These factors include, among others, the following: general economic business conditions; the success of certain cost containment initiatives, changes in project schedules, project contingencies and variations in water purchases; changes in regulations or regulatory treatment; availability and cost of capital; and the success of growth initiatives.

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