American Water Works Company, Inc.
) subsidiary West Virginia American Water has received an
approval from the Public Service Commission of West Virginia
(PSC) to increase the monthly water and sewer bills of the
residential customers. The revised rate will be applicable from
Oct 11, 2013.
Currently, the residential customers, consuming 3,315 gallons of
water per month, pay a monthly bill of $39.11. As per the
commission's approval, the new rate will be $41.88, up 7.1% from
the previous rate. The average monthly residential sewer bill
will increase by 14.4% from the previous rate to $40.92 for the
Per the agreement, West Virginia American Water will not be
allowed another base rate increase for water or wastewater prior
to Jan 1, 2015. The base rate hike will boost the company's water
and wastewater revenues by $8.4 million and $0.1 million,
The main objective of the current rate hike is to recover the
funds that West Virginia American invested since 2009 for the
improvement of the water distribution systems and water treatment
facilities, while upgrading its pumping stations, storage tanks
and computer systems.
Initially West Virginia American Water has filed for a rate hike
request to the commission on Dec 14, 2012. The company has
requested to increase the water bill of the residential
customers, using 3,315 gallons of water per month, by $8.13.
Upgrading of the existing infrastructure and addition of new
assets will help American Water to strengthen its system capacity
and provide nonstop water supply to its customers. These factors
will subsequently improve reliability, consumer confidence and
public safety. We believe that the rate hike approval will
further encourage American Water to invest substantially for
upgrading the infrastructure.
American Water currently has a Zacks Rank # 3 (Hold). However,
other water utilities that are worth considering include
Connecticut Water Service Inc.
) with a Zacks Rank #1 (Strong Buy), and
Consolidated Water Co. Ltd.
), each with a Zacks Rank #2 (Buy).
Voorhees, N.J.-based American Water was founded in 1886. The
company serves around 14 million people with water and
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