American Water Works Company, Inc.
) operating wing California American Water announced the
execution of a direct access power purchase agreement for its
large-scale facilities in Los Angeles and Ventura Counties. The
duration of the agreement is from Oct 2013 to Jan 2015.
The direct access program is expected to lead to substantial
cost savings for American Water. The savings in turn will
be passed onto the company's commercial customers in terms of
The program, supervised by the California Public Utilities
Commission, enables large commercial electricity consumers to buy
power directly from competitive energy service providers and
Although American Water hasn't disclosed how much it would
save, it estimates a 10% reduction in the current Southern
California Edison commercial rate. This roughly translates to
savings of around $163,000 per year for California American
California American Water separately announced that it will
realize savings of nearly $630,000 in Los Angeles via water
rights leases in the Central, Raymond and Main basins in the
fiscal period through 2013 to 2014.
American Water plans to gradually expand its groundwater
supplies and minimize its dependence on costly water imports. The
company expects the combined initiatives to lead to total savings
of $793,000 in Los Angeles and Ventura Counties.
American Water is poised to benefit from its varied
growth-centric strategies and is currently among the prime water
utilities in the U.S. working aggressively to retain its wide
customer base. The company has also been in an acquisition mode
purchasing 10 companies so far in 2013.
Across America, water utilities like American Water are
presently engaged in infrastructure modernization to offer
improved service reliability to its customers at competitive
rates. Its Virginia American Water subsidiary recently announced
investments of approximately $0.3 million for the improvement of
a water main at Foxchase Shopping Plaza in Alexandria, VA.
However, the company is subject to financial constraints owing
to budget austerities. The government projects about $1 trillion
investments are still required for water and wastewater upgrades
Currently, American Water Works carries a Zacks Rank #3
(Hold). Other better-placed water operators are Zacks Ranked #1
Connecticut Water Service Inc.
Consolidated Water Co. Ltd.
), and Zacks Ranked #2 (Buy)
The York Water Co.
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CONSOLTD WATER (CWCO): Free Stock Analysis
YORK WATER CO (YORW): Free Stock Analysis
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