Missouri American Water Files Rate Request Driven by $1.5 Billion in Water and Wastewater System Investments
Missouri American Water has filed a rate request with the Missouri Public Service Commission (MoPSC) to address $1.5 billion in water and wastewater system investments from January 2023 to May 2026. These investments aim to replace aging infrastructure, enhance water quality, and comply with environmental regulations. Key projects include replacing over 250 miles of pipes, upgrading treatment plants, and constructing new facilities in various counties. If approved, the average residential water bill could increase by $18 per month. The company's proposed rates also offer discounted options for customers facing financial hardship. The MoPSC's review process may take up to 11 months, with any new rates likely effective by mid-2025.
- $1.5 billion investment in water and wastewater systems to enhance infrastructure and service quality.
- Projects include upgrades in key areas such as St. Louis County, St. Charles County, Jefferson City, and Joplin.
- Potential for improved water quality, increased fire protection, and reliable service for 1.6 million Missourians.
- Average residential water bill could increase by $18 per month if the rate request is approved.
- Process for rate approval is extensive and could take up to 11 months, delaying potential benefits.
- Wastewater customers might see a monthly increase depending on their service area.
Insights
The $1.5 billion investment by Missouri American Water reflects a significant capital expenditure to modernize and enhance its water and wastewater infrastructure. These investments are aimed at replacing aging infrastructure, improving reliability and ensuring compliance with environmental regulations. For investors, this can indicate the company's proactive approach to maintaining and potentially expanding its customer base in Missouri. By addressing infrastructure needs, the company is mitigating risks associated with service disruptions and regulatory non-compliance, which can be costly both financially and reputationally.
However, these investments are also driving a proposed rate increase of $18.00 per month for the average residential water customer. This could lead to some customer dissatisfaction and potential pushback, which is already being managed through proposals for income-based rates and assistance programs.
The extensive review process by the Missouri Public Service Commission (MoPSC) means that the impact of these changes will not be immediate, with new rates likely becoming effective in mid-2025. Investors should consider the potential for both short-term financial strain due to high capital expenditure and long-term benefits once the infrastructure upgrades are completed and new rates are implemented.
The planned infrastructure investments by Missouri American Water are a strategic move in a highly regulated industry. By committing to substantial upgrades, the company is positioning itself as a reliable and forward-thinking utility provider. This can enhance its competitive stance within Missouri and potentially attract new customers or strengthen existing customer loyalty.
Importantly, the incorporation of income-based rates and assistance programs suggests a nuanced approach to addressing affordability concerns. This can mitigate the potential backlash from the rate increase, maintaining customer goodwill and potentially stabilizing customer retention rates.
The long timeline for regulatory approval and rate changes might cause some investors to be cautious in the short term. However, the transparency measures, including publicly accessible tariffs and information about the filings, can help build trust with stakeholders and regulatory bodies, potentially smoothing the approval process.
“We carefully plan investments in our water and wastewater systems to provide safe, clean and reliable service to nearly 1.6 million (one in four) Missourians in more than 90 counties throughout the state,” said Rich Svindland, president of Missouri American Water. “These prudent, ongoing investments show our commitment to protecting public health and safety in the communities we serve.”
These projects are important to continue providing quality water, increasing fire protection and improving service reliability for customers and include replacement of over 250 miles of aging water and wastewater pipe to help reduce main breaks and sewer overflows. Improvement projects also include treatment plant upgrades.
Key projects include:
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St. Louis County - Replacement of the intake pump station at the South Water Treatment Plant -
St. Charles County – Construction of new transmission main to add a second source of water supply -
Jefferson City - Construction of a new filter building at the water treatment plant -
St. Joseph - Upgrades at the water treatment plant and Randolph booster stations -
Joplin – Construction of a new carbon feed system at the treatment plant and well site treatment upgrades -
Eureka ,Smithton – Wastewater treatment plant upgrades including construction of new lift station and UV disinfection
The company’s last general rate case was filed with the MoPSC in July 2022 with a rate Order being approved in May 2023. New rates became effective on May 28, 2023.
If the company’s proposed rates are approved as filed with the MoPSC today, the water bill for the average residential customer using 5,475 gallons per month would increase about
Part of today’s filing with the MoPSC includes a proposed income-based rate for customers facing financial hardship. If approved by the MoPSC, residential customers below
The company’s rate request undergoes extensive public scrutiny by the MoPSC. This process includes numerous interrogatories, public hearings and evidentiary hearings and can take up to 11 months. To increase transparency of the process, the company’s proposed tariffs and other information about the filing are included on the company’s website, missouriamwater.com.
The company anticipates that any general rate changes proposed through this filing would not become effective until mid-2025, after a final rate Order is issued by the MoPSC.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, planned capital investments and water and wastewater system improvements, the outcome of the MoPSC’s final rate Order, and the amount and effective date of new water and wastewater rates. These statements are based on the current expectations of management of Missouri American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including with respect to (1) the terms of any settlement agreement or stipulation, and/or final order of the MoPSC, with respect to the above-referenced general rate case; (2) the timing of the implementation of new rates under the general rate case; (3) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect Missouri American Water; and (4) other economic, political, business and other factors that may impact or affect the water and wastewater industries generally or Missouri American Water specifically. Forward-looking statements are not guarantees or assurances of future performance or results, and Missouri American Water and its affiliates do not undertake any duty to update any forward-looking statement.
About American Water
American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in
For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.
About Missouri American Water
Missouri 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 1.6 million people. For more, visit missouriamwater.com and follow Missouri American Water on X, Facebook, Instagram, YouTube and LinkedIn.
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Media:
Christie
Senior Manager, External Communications
Cell: 417-529-9781
Christie.barnhart@amwater.com
Source: American Water Missouri
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