8-KOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Corporate Update (Mar 31, 2023)

Filed March 31, 2023For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced through its wholly-owned subsidiary, Indiana-American Water Company, that it has filed a general rate case with the Indiana Utility Regulatory Commission (IURC). The petition seeks an aggregate annualized incremental revenue increase of $86.7 million, which would be implemented through three step increases over several years, commencing in January 2024 and concluding in May 2025. This filing is a routine regulatory process aimed at adjusting rates to reflect infrastructure investments and operating costs. The proposed rate adjustment is based on a requested return on equity of 10.6% and a specific capital structure. The outcome of this rate case is subject to IURC approval, with the process expected to conclude by January 2024. Investors should note that the company has included cautionary statements regarding forward-looking statements, highlighting that actual results could differ materially due to various regulatory, legislative, and economic factors.

Key Highlights

  • 1Indiana-American Water Company filed a general rate case petition with the Indiana Utility Regulatory Commission (IURC) on March 31, 2023.
  • 2The company is seeking an aggregate annualized incremental revenue increase of $86.7 million.
  • 3The requested revenue increase will be implemented in three step increases: $43.2 million in Jan 2024, $18.1 million in May 2024, and $25.4 million in May 2025.
  • 4The petition is based on a proposed return on equity of 10.6% and a capital structure with a 56.2% equity component.
  • 5The regulatory process is expected to be completed by the end of January 2024.
  • 6The filing is a standard regulatory procedure and is subject to IURC approval.
  • 7The company included standard cautionary statements regarding forward-looking information and associated risks.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce that Indiana-American Water Company, a subsidiary of American Water Works Company, Inc., has filed a general rate case petition with the Indiana Utility Regulatory Commission (IURC) to adjust its water and wastewater rates.

Indiana-American Water is seeking an aggregate annualized incremental revenue increase of $86.7 million. This increase is proposed to be implemented in three steps: $43.2 million in January 2024, $18.1 million in May 2024, and $25.4 million in May 2025, subject to IURC approval.

The requested rate adjustment is based on a proposed return on equity of 10.6% and a capital structure with an equity component of 56.2%. The filing also notes that for rate determination purposes, an equity component of 48.2% is used due to regulatory practices in Indiana regarding certain zero-cost items or tax credit balances.

The company has cautioned that actual results may differ materially from forward-looking statements. Key uncertainties include the terms of any settlement or final order from the IURC, the timing of rate implementation, potential regulatory or legislative actions affecting the water and wastewater industries, and broader economic or business factors that could impact the company.