American Water Works Settles NJ Rate Case, $110M Revenue Boost

TL;DR

AWK settled its NJ rate case, getting $110M in new revenue effective immediately. EPS boost coming.

AI Summary

American Water Works Company, Inc. announced on August 12, 2024, a settlement in its New Jersey rate case. This settlement is expected to result in a net increase in annual revenues of approximately $110 million for its New Jersey American Water subsidiary, effective August 12, 2024. The company anticipates this will be accretive to its earnings per share in 2024.

Why It Matters

This settlement provides clarity on future revenue for American Water Works' New Jersey operations, potentially impacting its financial performance and investor confidence.

Risk Assessment

Risk Level: low — The filing reports a settled rate case, which is a routine regulatory event for utility companies and generally has a predictable financial impact.

Key Numbers

• $110 million — Annual Revenue Increase (Expected net increase for New Jersey American Water from the rate case settlement.)

Key Players & Entities

• American Water Works Company, Inc. (company) — Registrant
• New Jersey American Water (company) — Subsidiary involved in the rate case
• $110 million (dollar_amount) — Net increase in annual revenues from the settlement
• August 12, 2024 (date) — Effective date of the settlement and revenue increase

FAQ

Key Financial Figures

• $0.01 — ich Registered Common stock, par value $0.01 per share AWK New York Stock Exchange
• $161.7 million — January 19, 2024 seeking approximately $161.7 million of increased annualized revenues. The p
• $79.5 million — ies to the Stipulation have agreed to a $79.5 million annualized increase in New Jersey Ameri
• $5.05 billion — f 9.6%, (ii) an authorized rate base of $5.05 billion , (iii) a common equity ratio of 55.00%
• $4.15 b — ed ROE of 9.6%, authorized rate base of $4.15 billion, a common equity ratio of 54.56%

Filing Documents

• awk-20240812.htm (8-K) — 30KB
• 0001410636-24-000151.txt ( ) — 180KB
• awk-20240812.xsd (EX-101.SCH) — 2KB
• awk-20240812_def.xml (EX-101.DEF) — 14KB
• awk-20240812_lab.xml (EX-101.LAB) — 25KB
• awk-20240812_pre.xml (EX-101.PRE) — 15KB
• awk-20240812_htm.xml (XML) — 3KB

01. Other Events

Item 8.01. Other Events. Stipulation and Settlement of New Jersey-American Water Company, Inc. ("New Jersey American Water") General Rate Case On August 12, 2024, New Jersey American Water, a wholly owned subsidiary of American Water Works Company, Inc. (the "Company"), entered into a stipulation and settlement (the "Stipulation") with the staff of the New Jersey Board of Public Utilities (the "NJBPU") and the New Jersey Division of Rate Counsel, with respect to a general rate case filed by New Jersey American Water on January 19, 2024 seeking approximately $161.7 million of increased annualized revenues. The parties to the Stipulation have agreed to a $79.5 million annualized increase in New Jersey American Water's water and wastewater revenues, which is based on (i) an authorized return on equity ("ROE") of 9.6%, (ii) an authorized rate base of $5.05 billion , (iii) a common equity ratio of 55.00%, and (iv) a long-term debt ratio of 45.00%, compared to an authorized ROE of 9.6%, authorized rate base of $4.15 billion, a common equity ratio of 54.56% and a long-term debt ratio of 45.44%, all as approved in New Jersey American Water's last general rate case in 2022. New Jersey American Water will continue to defer as a regulatory asset or liability, as appropriate, until its next general rate case, the difference between its pension expense and other post-employment benefits (OPEB) expense and those amounts included in base rates. The Stipulation was posted on the NJBPU's website on August 21, 2024. The Administrative Law Judge at the Office of Administrative Law issued an Initial Decision adopting the Stipulation without modification on August 15, 2024. The Stipulation is anticipated to be presented to the NJBPU for approval at its September 4, 2024 public agenda meeting. If approved as stipulated, new rates shall be effective as of September 15, 2024. Cautionary Statement Concerning Forward-Looking Statements Certain statements included in this Current Report

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMERICAN WATER WORKS COMPANY, INC. Dated: August 21, 2024 By: /s/ DAVID M. BOWLER David M. Bowler Executive Vice President and Chief Financial Officer 3

View Full Filing

View this 8-K filing on SEC EDGAR