By Associated Press - Monday, January 11, 2016

MISSOULA, Mont. (AP) - The owner of the water system that serves the city of Missoula has sold it to another company without the approval of the Public Service Commission and despite a court ruling that gives the city the right to purchase the utility for $88.6 million, a PSC spokesman said.

The Carlyle Group sold Mountain Water Co. and two water companies in California to Liberty Utilities for $327 million. The sale happened Friday, said PSC spokesman Eric Sell.

“This is the first time anyone has ever purchased a utility in the state without the PSC’s approval,” Sell said.

A District Court judge in Missoula County had stayed PSC deliberations on the proposed sale after the city of Missoula won the right to use eminent domain to buy the water system. The fair market value was set at $88.6 million.

Missoula Mayor John Engen said Monday the city will still own the water system.

“What Liberty and Carlyle have done here is once again sort of ignored the system, thumbed their noses at the courts, thumbed their noses at the PSC, and have bilaterally decided that they’re in charge here,” Engen told the Missoulian. “We believe that the system suggests otherwise.”

The PSC is contemplating what actions it will take in response to the sale.

“We’re shocked by this to say the least, and it’s frustrating that they’ve decided to bypass us,” Sell said. “And we are certainly not going to let this go forward without doing anything, to put it lightly.”

California regulators approved the sale of the two California companies last week.

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