In 2023, Illinois American Water Invests $297 Million Throughout State and $69.7 Million in Local Water & Wastewater Infrastructure in Southern Division

Rhea-AI Summary

Illinois American Water (IAW) has invested $297 million in water and wastewater system infrastructure replacement and enhancements throughout Illinois. The company has invested $1.6 billion in water and wastewater infrastructure since 2013. Some of the major 2023 capital projects include water treatment plant construction in Cairo, water main replacement in Belleville, water main relocation in Granite City, chemical feed improvement in East St. Louis water treatment plant, clearwell/high service pump station construction in East St. Louis, ultraviolet disinfection installation in East St. Louis, emergency repairs in East St. Louis, and intake improvements in East St. Louis.

Insights

Financial Analyst

Illinois American Water's capital investment of $297 million in 2023 is a significant expenditure with the potential to impact both short-term and long-term financial performance. The investment is directed towards infrastructure enhancements, which is crucial for maintaining service quality and compliance with regulatory standards. From a financial perspective, such substantial capital allocations could affect the company's cash flow and debt levels in the short term. However, if managed effectively, these investments can lead to operational efficiencies, reduced maintenance costs and improved system reliability, which may enhance long-term profitability and shareholder value.

Investors should note the scale of the investment relative to the company's overall financials. The $1.6 billion invested since 2013 suggests a sustained commitment to infrastructure, which is essential for utility companies facing aging systems. The balance between capital expenditures and the rate base growth, along with the regulatory environment's impact on cost recovery, is critical. The ability to recoup these investments through rate adjustments is a key factor in maintaining financial health. The company's interaction with state and federal regulators indicates a proactive stance in compliance, which can mitigate risks associated with regulatory penalties or service disruptions.

Market Research Analyst

The investment in water and wastewater system infrastructure by Illinois American Water reflects broader trends in the utilities sector, where aging infrastructure across the United States has necessitated increased capital spending. This trend presents an opportunity for companies providing construction, engineering and materials for such projects. Moreover, the focus on water quality systems and technology aligns with growing consumer and regulatory demands for sustainability and environmental protection.

Market dynamics suggest that companies investing in advanced treatment facilities, like ultraviolet disinfection systems, may gain a competitive edge. This is particularly relevant as water scarcity and quality concerns become increasingly pressing. By enhancing infrastructure, Illinois American Water is likely positioning itself to meet future demand and regulatory requirements, which could impact market share and industry standards. The emphasis on quality and reliability may also strengthen customer satisfaction and loyalty, which are important factors in regulated markets where competition is limited.

Environmental Policy Expert

The strategic investment by Illinois American Water in water and wastewater infrastructure has significant environmental implications. Transitioning from chlorine gas to liquid chlorine, for instance, reduces the risk of hazardous leaks, aligning with safety and environmental policies. The installation of state-of-the-art disinfection systems represents an adherence to stringent water quality standards, which is critical as environmental regulations evolve.

Environmental policy increasingly influences business operations within the utility sector. Companies that proactively upgrade their systems to comply with or exceed current regulations may benefit from reduced exposure to future policy changes that require costly, rapid compliance measures. Illinois American Water's investments can be seen as a move to future-proof its operations against such risks. Additionally, the focus on sustainable infrastructure development is likely to be viewed favorably by regulators and could facilitate smoother negotiations in rate cases and other regulatory proceedings.

Illinois American Water continues to proactively maintain & enhance local community’s water & wastewater systems

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

Locally, in the company’s Southern Division, the capital investment in infrastructure has reached $69.7 million in 2023. The Southern Division is comprised of the Cairo, Interurban (Metro East), Hardin County water systems; Shiloh and Granite City wastewater systems; and Rosiclare water and wastewater systems.

“Since 2013, Illinois American Water has invested $1.6 billion in water and wastewater infrastructure throughout Illinois. These investments involved making repairs to existing infrastructure and replacements when needed. At Illinois American Water, we analyze where improvements are needed, and then we strategically and efficiently direct capital improvements to those areas most in need,” said Rebecca Losli, president, Illinois American Water. “We work with state and federal regulators from the Environmental Protection Agency and Illinois Commerce Commission to make sure we meet all requirements and policies not only for today but anticipate what may be ahead of our communities and customers tomorrow.”

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

• Water treatment plant construction, Cairo ($10.9 million). A new groundwater plant is being constructed that will include a building with a pressure filter room, chemical rooms, a new lab and operator room. Two groundwater wells and associated water treatment equipment for a groundwater source are also being installed along with new yard piping and a new high service pump building. The new chemical feed design will bring everything up to American Water quality standards. The existing surface water treatment plant and equipment can be decommissioned and transitioned to a groundwater source.

• Water main replacement, Belleville ($3.3 million). In downtown Belleville, near the historic fountain, approximately 1,700 feet of new water main (and valves) was installed over the summer. These mains were approximately 75 years old. There were numerous service line replacements. The company worked with City of Belleville officials to complete this project over the summer so that it would not interrupt a busy schedule of community events around the square. The project was completed before Labor Day, several weeks early.

• Water main relocation, Granite City ($2.9 million). The Port District in Granite City and Illinois Department of Transportation have an ongoing roadway improvement and water main are being replaced in the area.

• Chemical feed improvement, East St. Louis water treatment plant ($4.5 million). A new chemical feed facility is being constructed at the East St. Louis Water Treatment Plant. This project will allow for the transition from chlorine gas to liquid chlorine. In addition, this project will centralize and replace the chemical feed for both of the facility’s treatment trains.

• Clearwell/High Service pump station, East St. Louis ($2.6 million). A new clearwell and High-Service pump station at the East St. Louis Water Treatment Plant were constructed to address aging infrastructure and to provide for more clearwell storage The East St. Louis Water Treatment Plant is a regional plant serving the Metro East.

• Ultraviolet disinfection installation, East St. Louis ($1.9 million). A state-of-the-art disinfection system has been installed at the East St. Louis water treatment plant to further protect customers in the Metro East.

• Emergency repairs, East St. Louis ($4.1 million). This project replaces a portion of the transmission main that feeds the East St. Louis and Belleville distribution systems. In addition, replacement of this water main also reduces the potential impact to the embankment of the Jackie Joyner-Kersee Metrolink train tracks if future water main breaks would occur.

• Intake improvements, East St. Louis ($1.8 million). Improvements are being made to the existing river house intake at the East St. Louis Water Treatment Plant to allow for backup diesel pumping during low river conditions.

“Our systems and facilities continue to be resilient, reliable, and dependable for our customers here in the Southern Division and across our state,” said Fred Campbell, senior manager of operations, Southern Division. “We take a strategic, proactive approach, with customer service and reliability driving our investments. The investments and enhancements at our water treatment plant near East St. Louis are exciting and show our focus on water quality and our commitment to our customers and communities in the region.”

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 (formerly 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 THREE YEARS IN A ROW!℠
For J.D. Power 2022 award information, visit jdpower.com/awards.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231228860165/en/

Media:

Terry Mackin

Director, External Affairs and Communications

Terry.Mackin@amwater.com

Source: Illinois American Water

FAQ

How much has Illinois American Water invested in water and wastewater system infrastructure replacement and enhancements throughout Illinois?

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

How much has Illinois American Water invested in water and wastewater infrastructure since 2013?

Illinois American Water has invested $1.6 billion in water and wastewater infrastructure since 2013.

What are some of the major 2023 capital projects of Illinois American Water in the Southern Division?

Some of the major 2023 capital projects in the Southern Division include water treatment plant construction in Cairo, water main replacement in Belleville, water main relocation in Granite City, chemical feed improvement in East St. Louis water treatment plant, clearwell/high service pump station construction in East St. Louis, ultraviolet disinfection installation in East St. Louis, emergency repairs in East St. Louis, and intake improvements in East St. Louis.