Capital Region Water advances $120m PENNVEST loan alongside new non-rate revenue streams

Capital Region Water advances $120m PENNVEST loan alongside new non-rate revenue streamsThe Harrisburg utility approved borrowing resolutions for a massive 1% interest state loan while finalizing energy recovery and demand response initiatives to offset infrastructure costs.

The board approved borrowing and reimbursement resolutions for a $120 million PENNVEST profile loan, which carries a 1% interest rate over a 20-year term.

CRW enrolled in a Voltus-managed PJM demand response program expected to generate over $240,000 in its first year without impacting core operations.

A $27 million energy recovery project at the wastewater facility is nearing completion, currently generating $60,000 a month by injecting renewable natural gas into the local pipeline.

The utility awarded a $2.31 million contract to Rogele Inc. for the 2026 Water System Improvements Project, coming in well under the $3 million budget.

Capital Region Water (CRW) is aggressively pursuing low-cost financing and alternative revenue streams to fund major capital upgrades across its service area in Harrisburg, Pennsylvania. During its February 25 meeting, the CRW board approved a suite of resolutions to advance a $120 million profile loan from the Pennsylvania Infrastructure Investment Authority (PENNVEST) for wastewater system improvements. The PENNVEST financing carries a 1% interest rate over a 20-year term and will be drawn down in multiple phases. To facilitate the initial loan settlement and subsequent phases, the board approved borrowing and reimbursement resolutions alongside legal engagement contracts with bond counsel Eckert Seamans and general counsel Salzmann Hughes. The massive wastewater borrowing package was accompanied by several operational moves designed to generate non-rate revenue, a strategy utility leadership emphasized as critical for sustaining customer assistance programs and stabilizing rates. The board authorized CRW's enrollment in a PJM Emergency Load Response Program managed by Voltus. Under the terms of the agreement, CRW will participate in a scheduled two-hour capacity test, shedding two megawatt-hours of electricity using its existing onsite generators. Successful completion of the test will yield a $151,000 payment. The utility could also earn an estimated $92,450 annually by shedding load during grid emergencies. Staff noted that the program carries no enrollment costs or non-performance penalties, and operations will not be compromised due to a new one-megawatt generator at the wastewater facility. This demand response initiative joins CRW's $27 million energy recovery improvement project at its advanced wastewater treatment facility, which is nearing substantial completion. The project replaces aging 1984 equipment with a modern system that refines biogas into high-quality renewable natural gas (RNG) for direct injection into the local UGI Energy Services pipeline. The utility is currently generating approximately $60,000 per month in RNG sales and expects to increase that production significantly once new solids conditioning improvements and thermochemical hydrolysis processes are fully operational. On the drinking water side, the board awarded a construction contract for the 2026 Water System Improvements Project to Rogele Inc. The Harrisburg-based heavy underground utility contractor, which has been operating since 1961, submitted a winning base bid and alternate totaling $2.31 million, well below the project's $3 million budget. The work involves installing nearly 6,700 linear feet of new water main, valves, hydrants, and service lines to replace undersized mains and loop sections of the distribution system. Rogele was also awarded a $2.12 million indefinite delivery/indefinite quantity contract for on-call sewer and water excavation repairs over a three-year term.