Pennsylvania American Water, a business wing of
American Water Works Company Inc.
) announced its plans to set up two new transmission lines in
Scranton, PA to replace a 104-year-old aging pipeline system.
The transmission lines will be installed in the city's south
side across the Roaring Brook flood control channel and will cost
the company roughly $1.5 million. The pipeline system, a crucial
water asset serving Scranton, has been suffering from leaks and
other infrastructure impairments for a long time. The project
will improve service reliability for customers in Scranton and
American Water Works will install roughly 350-feet of new 30-
and 24-inch ductile iron pipe across the channel linking River
Street to Mattes Avenue. The pipe will run parallel to the
current 36-inch pipe that services the Keyser Valley and Taylor
areas. The upgrade is expected to begin in Oct 2013 and will be
completed by the end of the year.
American Water Works is lately modernizing its existing water
systems across the U.S. forced by deteriorating infrastructure.
The implementation of proper regulatory rate mechanism for water
utilities in the U.S. has provided an incentive to the company
for undertaking infrastructure upgrade projects. Recently,
American Water Works filed for a rate increase to the California
Public Utilities Commission for the implementation of its
large-scale Monterey Peninsula Water Supply Project.
In addition, American Water Works' inorganic
growth-by-acquisition strategy will bode well for its future
prospects. So far in 2013, American Water Works closed ten
Another emerging growth avenue for American Water Works is the
water services required by shale explorers in hydraulic
fracturing. However, water utilities are still experiencing
financial crunch owing to budgetary constraints. The U.S.
government projects about $1 trillion in capital expenditures for
water and wastewater upgrades by 2020.
Water utilities like American Water Works needs to improve
their assets to optimize the existing resources as the rising
threat of global warming is contributing to drought in almost
half of the American states.
Currently, American Water Works carries a Zacks Rank #3
(Hold). Investors who are looking to add water utilities in their
portfolio can opt for better-placed operators like Zacks Ranked
#1 (Strong Buy)
Connecticut Water Service Inc.
Consolidated Water Co. Ltd.
), and Zacks Ranked #2 (Buy)
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CONSOLTD WATER (CWCO): Free Stock Analysis
SJW CORP (SJW): Free Stock Analysis Report
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