Summary
American Water Works Company, Inc. (AWK) announced through its subsidiary, New Jersey-American Water Company, Inc. (NJAW), that the New Jersey Board of Public Utilities (NJBPU) approved a settlement for an annual increase in water and wastewater rates. This settlement will result in approximately $22 million in increased annual revenue for NJAW, based on an authorized return on equity of 9.75%. The new rates are effective for services rendered on or after September 21, 2015. This event is significant as it directly impacts the revenue and profitability of a key subsidiary in a regulated market. Investors should note that this rate increase is a positive development for AWK, as it enhances the earnings potential of its New Jersey operations. The approval demonstrates a constructive regulatory environment for NJAW, allowing it to recover costs and achieve a reasonable rate of return. The details of the settlement and the specific impact on customer rates will be further elaborated in the press release and fact sheet filed as an exhibit.
Key Highlights
- 1New Jersey-American Water Company, Inc. (NJAW), a subsidiary of AWK, received approval for a rate increase.
- 2The approved annual rate increase is approximately $22 million for water and wastewater services.
- 3The rate increase is based on an authorized return on equity of 9.75%.
- 4New rates will become effective for services rendered on or after September 21, 2015.
- 5The approval came from the New Jersey Board of Public Utilities (NJBPU) following a settlement agreement.
- 6This regulatory approval is expected to positively impact AWK's revenue and profitability in its New Jersey operations.