8-KOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Corporate Update (May 3, 2023)

Filed May 3, 2023For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced a significant development in its Missouri operations via an 8-K filing on May 3, 2023. The Missouri Public Service Commission (MoPSC) approved a "black box" settlement for Missouri-American Water's general rate case. This settlement authorizes an annualized revenue increase of $44.3 million for water and wastewater services, excluding previously approved infrastructure surcharges of $50.7 million. The new rates are slated to become effective by May 31, 2023, following an original filing that sought a higher increase. The approved revenue increase reflects substantial capital investments made by Missouri American Water since its last rate case, amounting to $770 million. The company's rate base for this case is valued at $2.3 billion, with an approved return on equity (ROE) of 9.75% and a long-term debt ratio of 50.0%. While the approved increase is lower than initially requested, it provides regulatory clarity and supports the recovery of necessary infrastructure investments for the subsidiary.

Key Highlights

  • 1MoPSC approved a $44.3 million annualized revenue increase for Missouri American Water, effective by May 31, 2023.
  • 2The approved increase is part of a "black box" settlement in the general rate case.
  • 3The settlement excludes $50.7 million in previously approved infrastructure surcharges.
  • 4The rate case was driven by $770 million in incremental capital investments since the 2021 rate case.
  • 5Missouri American Water's rate base was established at $2.3 billion for this case.
  • 6Approved Return on Equity (ROE) set at 9.75%, with a long-term debt ratio of 50.0%.

Frequently Asked Questions

The primary impact is the confirmation of a regulatory-approved revenue increase for its Missouri subsidiary, Missouri American Water. This settlement provides clarity on future revenue streams and supports the recovery of significant infrastructure investments.

The Missouri Public Service Commission (MoPSC) approved an annualized revenue increase of $44.3 million for water and wastewater services. These new rates are expected to be effective by May 31, 2023.

The initial filing requested a $105.1 million increase. However, subsequent filings for infrastructure investments adjusted the rate case dynamics. The final approved increase of $44.3 million reflects a negotiated settlement and is intended to cover $770 million in capital investments made by the subsidiary.

The MoPSC approved a rate base of $2.3 billion for Missouri American Water. The approved return on equity (ROE) is 9.75%, and the long-term debt ratio is maintained at 50.0%.