Kentucky American Water Files Rate Case with Kentucky PSC

  Kentucky American Water Files Rate Case with Kentucky PSC

Approximately $58 million in capital investments drive need for rate increase,
 but cost for residential water service would remain at less than a penny per
                                    gallon

Business Wire

LEXINGTON, Ky. -- December 28, 2012

Kentucky American Water filed an application today with the Kentucky Public
Service Commission requesting a general rate increase for its customers. The
request is driven by the approximately $58 million in capital investments the
company has made since last filing for a rate increase nearly three years ago,
in February 2010.

The company’s request, if granted in full, would increase the average
residential customer rate by $5.76 per month -- from the current average of
$32.75 per month to $38.51 per month -- based on an average monthly usage of
4,500 gallons. Even with this proposed increase, the cost of tap water for
residential customers would remain at less than one penny per gallon, with the
average residential customer receiving a day’s worth of quality tap water for
approximately $1.27.

Among the capital improvements in local infrastructure included in the rate
case are upgrades to the company’s water distribution systems, such as
replacement of aging water mains and manually-read water meters, and
improvements to water treatment plants, such as the replacement of pumps.
These capital investments are necessary to enhance overall customer service,
improve operational efficiency and maintain reliable, quality drinking water
service and fire protection for the company’s customers in portions of 10
Kentucky counties.

“We work diligently to hold expenses and rates down as much as possible, but
we must make ongoing, prudent and necessary investments in our water systems
so that we can continue providing reliable drinking water service and meet all
federal and state drinking water quality regulations,” said Cheryl Norton,
president of Kentucky American Water.

“According to the American Society of Civil Engineers, a staggering number of
water utilities across the country are struggling to maintain their current
systems -- much less invest in them for the future -- because they have gotten
behind on making necessary upgrades,” she said. “Fortunately, the situation is
vastly different for Kentucky American Water, but only because we have
remained committed to making necessary water infrastructure improvements. We
balance this need for ongoing, capital investment with a continual effort to
become increasingly efficient in our operations, and that helps us mitigate
the financial impact on our customers as much as possible.”

Today’s request seeks an increase in total revenue of approximately $12.3
million.

The Kentucky PSC will conduct an extensive review of the company’s rate
application over the next several months in an open and transparent manner.
Any new rates established by the PSC in this case would not be effective
before July 27, 2013.

Kentucky 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 approximately half a million
people.

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 approximately 7,000 dedicated professionals who provide drinking
water, wastewater and other related services to an estimated 15 million people
in more than 30 states and parts of Canada. More information can be found by
visiting www.amwater.com.

Contact:

Kentucky American Water
Susan Lancho
O: 859-268-6332
M: 859-537-0736
Susan.lancho@amwater.com
 
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