8-KOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Corporate Update (Feb 25, 2022)

Filed February 25, 2022For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced a significant development regarding its West Virginia subsidiary. The Public Service Commission of West Virginia (PSC) has approved a general rate case, authorizing annualized incremental revenues of $14.8 million. This increase, effective February 25, 2022, will be implemented through new water and wastewater rates. This rate increase is a positive development for AWK, allowing its West Virginia operations to recover investments and generate higher earnings. The authorized return on equity (ROE) has slightly increased to 9.80%, signaling regulatory acknowledgment of the company's capital needs and investment in infrastructure. The authorized rate base of $734.0 million further underscores the scale of the utility's operations in the state.

Key Highlights

  • 1West Virginia PSC approved new water and wastewater rates for AWK's subsidiary.
  • 2Authorized annualized incremental revenues of $14.8 million.
  • 3New rates are effective February 25, 2022.
  • 4Authorized return on equity (ROE) increased slightly to 9.80% from 9.75%.
  • 5Authorized rate base set at $734.0 million.
  • 6Order includes adjustments for deferred income taxes and infrastructure surcharges.

Frequently Asked Questions

The main impact is the authorization of new water and wastewater rates for AWK's West Virginia subsidiary, leading to an estimated $14.8 million in annualized incremental revenues. This will allow the company to recover costs associated with its investments and improve profitability in the state.

The authorized ROE has seen a slight increase, from 9.75% in the previous rate case (effective February 2019) to 9.80% under the new order. This marginal increase reflects the regulator's approval of the company's equity financing structure and expected return.

The new rates are effective as of February 25, 2022. The Public Service Commission of West Virginia has authorized a total rate base of $734.0 million for the subsidiary.

Yes, the $14.8 million in annualized incremental revenues is subject to certain adjustments. These include reductions of $1.6 million for excess accumulated deferred income taxes resulting from the Tax Cuts and Jobs Act, and $10.2 million for infrastructure surcharges.