Rate Adjustment for Illinois American Water Approved by Illinois Commerce Commission

BELLEVILLE, Ill.--(BUSINESS WIRE)--Following an 11-month review, the Illinois Commerce Commission (ICC) today issued an order adjusting rates for Illinois American Water. Ongoing enhancement and maintenance of the company’s water and wastewater infrastructure to ensure reliable treatment and delivery systems are the main drivers behind the rate change. Approximately $180 million in infrastructure investments statewide was not reflected in base rates prior to this rate order.

“Rate adjustments allow us to continue making critical investments in water and wastewater plants, pumps and pipelines. These investments help us to enhance customer service and reliability, as well as fire protection for customers”

According to the ICC, the rate order will result in approximately $17.9 million in additional annual revenue for the company. The order is below what was filed by the company on October 27, 2011. According to Karla Olson Teasley, president of Illinois American Water, the lower return-on-equity allowed in the rate order is disappointing and could impact the company’s ability to attract capital for important infrastructure projects in Illinois.

“Rate adjustments allow us to continue making critical investments in water and wastewater plants, pumps and pipelines. These investments help us to enhance customer service and reliability, as well as fire protection for customers,” said Teasley.

The company’s updated rate filing in March 2012 reflected a 2.1 percent decrease in the company’s operating and maintenance costs since the last rate order in April 2010.

Teasley added that the company’s goal is to balance the continuous need for significant capital investment to meet increasing state and federal requirements while at the same time controlling costs wherever and whenever possible. The U.S. EPA says the nation’s water utilities will need to make more than $335 billion in infrastructure investments -- $15 billion in Illinois -- over the next 20 years to replace thousands of miles of pipe and for upgrades to treatment plants, storage tanks and other assets to ensure public health.

The amount of the rate increase customers will experience will vary among the company’s operating districts in Peoria, Pekin, Lincoln, Champaign, Streator, Pontiac, Sterling, Alton, Cairo, South Beloit, Interurban (Belleville, East St. Louis and Granite City) and Chicago Metro.

Illinois American Water cannot increase rates without ICC approval. Illinois American Water’s rates are based on the true cost of providing water and wastewater service, as reviewed by the ICC. New rates resulting from the order are expected to take effect October 1. Customers will receive communication from the company further explaining the rate change.

More than 90 percent of Illinois American Water’s customers statewide report they are satisfied or extremely satisfied with customer service provided by Illinois American Water.

About Illinois American Water

Illinois American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to more than 1.2 million people. American Water also operates a customer service center in Alton and a quality control and research laboratory in Belleville.

Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 15 million people in more than 30 states, as well as parts of Canada. More information can be found by visiting www.amwater.com.