In 2023, Illinois American Water Invested $297 Million Throughout State and $32 Million in Local Water & Wastewater Infrastructure in Northern Division

Rhea-AI Summary

Illinois American Water (ILAW) invested $297 million in water and wastewater system infrastructure replacement and enhancements throughout Illinois in 2023. The company's Northern Division, including the Chicago Metro water and wastewater systems, South Beloit water system, and Santa Fe wastewater system, received a capital investment of $32 million. Illinois American Water has invested a total of $1.6 billion in water and wastewater infrastructure throughout Illinois over the past decade. Major 2023 capital projects in the Northern Division included main and manhole rehabilitation, water main replacement, and sewer rehabilitation.

Insights

Financial Analyst

The significant investment by Illinois American Water (ILAW) in their water and wastewater systems represents a notable capital expenditure that could influence the company's financial health. With $297 million directed towards infrastructure enhancements in 2023, such capital investments can lead to increased depreciation expenses and potentially higher future maintenance costs. However, these investments are often necessary for regulatory compliance and can improve long-term operational efficiency. Stakeholders should monitor the company's debt levels and interest expenses, as large infrastructure projects are typically financed through debt. Additionally, the capital expenditure's impact on ILAW's cash flow should be considered, as this could affect the company's ability to pay dividends or invest in further growth opportunities.

Market Research Analyst

ILAW's infrastructure investment strategy may well position the company for competitive advantage within the utility sector. By focusing on the replacement and enhancement of crucial water and wastewater systems, ILAW is not only adhering to regulatory standards but also potentially improving customer satisfaction through increased reliability and quality of service. This proactive approach might enhance the company's reputation and customer loyalty, which can be a differentiating factor in the highly regulated utility market. In the long run, reliable infrastructure can lead to cost savings on emergency repairs and service disruptions, which might translate to stable revenue streams. Market analysts would be interested in how these investments align with industry trends towards sustainability and infrastructure resilience.

Economist

From an economic perspective, ILAW's infrastructure investments have potential multiplier effects on the local economy. Infrastructure projects can create jobs and stimulate economic activity in the short term. Over the long term, improved water and wastewater systems can contribute to public health, property values and attract new businesses, fostering economic development. Economists would evaluate the opportunity cost of such investments, weighing the immediate fiscal impact against the anticipated economic benefits. The scale of investment, such as ILAW's $1.6 billion over a decade, can also be indicative of the company's commitment to long-term economic sustainability and resilience, which is increasingly important in the context of climate change and urban growth.

ILAW continues to proactively maintain & enhance local community’s water & wastewater systems

CHICAGO--(BUSINESS WIRE)-- In 2023, Illinois American Water invested $297 million in water and wastewater system infrastructure replacement and enhancements throughout the state. This work included installing new pipes, pumps, hydrants, valves, lift stations, water treatment facilities, storage tanks, new water quality systems and technology.

Locally, in the company’s Northern Division, the capital investment in infrastructure reached $32 million in 2023. The Northern Division is comprised of the Chicago Metro water and wastewater systems, South Beloit water system and Santa Fe wastewater system.

“For more than a decade, Illinois American Water has invested $1.6 billion in water and wastewater infrastructure throughout Illinois. These improvements include repairs to existing infrastructure and replacements when needed,” said Rebecca Losli, president, Illinois American Water. “We work with state and federal regulators from the Environmental Protection Agency and Illinois Commerce Commission to meet all requirements and policies, not only for today, but in anticipation of what may be ahead of our communities and customers tomorrow. After careful analysis of where improvements are needed, we strategically and efficiently direct capital improvements to those areas most in need.”

Examples of a few major 2023 capital projects in the Northern Division (not a full list of local capital projects):

• Main and manhole rehabilitation, Wastewater – Country Club ($7.5 million) – Our team rehabilitated approximately 68 sanitary manholes; 4,000 feet of sewer pipe; and 275 public laterals. In addition, 389 service connections were repaired in the Country Club District sanitary area.
• Water main replacement, Water – DuPage Inverness ($2.1 million) - This project, located in Chicago Metro consists of the replacement of 3,300 linear feet of 6-inch main with 8-inch ductile iron pipe. The main will be relocated from the rear yard of the house to the front yard with plans to retire the rear yard main in the future.
• Water main replacement, Bolingbrook/Chicago Metro Water – West Suburban ($5.9 million) – The Queenswood Road Rear Yard Water Main Replacement project, located in Bolingbrook, consists of the replacement of 9,595 linear feet of 6-inch and 8-inch main with 8-inch ductile iron pipe. The main was relocated from the rear yard of the house to the front yard in 2022, and the rear yard main was retired in 2023.
• Sewer rehabilitation, Bolingbrook/Chicago Metro Water – West Suburban ($716,000) - This project consists of the structural rehabilitation of 4,704 linear feet of existing 8-inch sanitary sewer main with cured-in-place pipe liner. This rehabilitation extends the life of the existing pipe and reduces the need to replace the existing sewers.

“Our systems and facilities continue to be resilient, reliable, and dependable for our customers here in the Northern Division and across our state,” said Kevin Hillen, senior manager of operations, Northern Division. “We take a strategic, proactive approach, with customer service and reliability driving our investments.”

About American Water
American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people with regulated operations in 14 states and on 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.

As one of the fastest growing utilities in the U.S., American Water expects to invest $34 to $38 billion in infrastructure repairs and replacement, system resiliency and regulated acquisitions over the next 10 years. The company has a long-standing history of executing its core operations, aligned with sustainable best practices, through its commitments to safety, affordability, customer service, protecting the environment, an inclusive workforce and strengthening communities.

American Water has been recognized on the 2023 Bloomberg Gender-Equality Index for the fifth consecutive year, ranked 18th on Barron’s 100 Most Sustainable U.S. Companies 2023 List, earned the U.S. Department of Homeland Security SAFETY Act designation and U.S. Environmental Protection Agency’s WaterSense® Excellence Award, among additional state, local and national recognitions.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X (formally Twitter) and Instagram.

About Illinois American Water
Illinois American Water, a subsidiary of American Water, is the largest investor-owned water utility in the state, providing high-quality and reliable water and wastewater services to approximately 1.3 million people. American Water also operates a quality control and research laboratory in Belleville.

ILLINOIS AMERICAN WATER WAS RANKED HIGHEST IN CUSTOMER SATISFACTION WITH LARGE WATER UTILITIES IN THE MIDWEST FOUR YEARS IN A ROW!℠
For J.D. Power 2023 award information, visit jdpower.com/awards.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240111263558/en/

Media:

Anna Kubas

Senior Manager of External Affairs and Communications

Anna.Kubas@amwater.com

Source: Illinois American Water

FAQ

How much did Illinois American Water invest in water and wastewater system infrastructure in 2023?

Illinois American Water invested $297 million in water and wastewater system infrastructure replacement and enhancements throughout Illinois in 2023.

What is the capital investment in infrastructure for Illinois American Water's Northern Division?

The capital investment in infrastructure for Illinois American Water's Northern Division reached $32 million in 2023.

What is the total investment of Illinois American Water in water and wastewater infrastructure throughout Illinois over the past decade?

Illinois American Water has invested a total of $1.6 billion in water and wastewater infrastructure throughout Illinois over the past decade.

What were some major 2023 capital projects in Illinois American Water's Northern Division?

Some major 2023 capital projects in Illinois American Water's Northern Division included main and manhole rehabilitation, water main replacement, and sewer rehabilitation.