Kentucky American Water Granted New Rates by Public Service Commission

  Kentucky American Water Granted New Rates by Public Service Commission

New Rates Cover Infrastructure Investments of $58 Million Incurred Since 2010;
                    Customers Will Receive Credit on Bills

Business Wire

LEXINGTON, Ky. -- October 25, 2013

The Kentucky Public Service Commission today approved new rates for Kentucky
American Water customers, reaching a decision on a rate increase requested by
the company in December 2012.

As permitted by Kentucky law, on July 27, 2013, Kentucky American Water put
into effect the rates it originally proposed last December. The rates approved
by the PSC today are lower than those implemented in July. With the new,
PSC-approved rates, water service for the average residential customer using
4,500 gallons of water per month will be approximately $36.30, or about $1.21
per day for quality tap water, which is still less than a penny per gallon.
Other adjustments determined by today’s PSC decision affected rates for
services such as new taps and meter services, for example.

Kentucky American Water filed for a rate increase in December 2012 to cover
approximately $58 million in system investments since the last rate increase
request was made in 2010. Such projects include replacing aging water mains
and manually read water meters as well as making improvements at water
treatment plants.

“As a utility whose services are critical to ensuring public health, we take
our responsibility to provide quality drinking water seriously, and as such,
are committed to keeping our systems and facilities well-maintained and
serviced,” said Cheryl Norton, president. “The ongoing capital investments we
make are necessary to ensure that such quality service continues.”

Since the PSC-approved rates are lower than those implemented in July,
Kentucky American Water will refund the difference to customers, plus
interest, through a credit on customers’ bills within the next 60 days. Former
customers affected by the rate reduction will receive checks within the same
timeframe. The average residential refund with interest will be approximately
$6.

Additional information can be found on the Kentucky Public Service
Commission’s website at psc.ky.gov.

About Kentucky American Water

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. For more information visit www.kentuckyamwater.com.

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 6,700 dedicated professionals who provide drinking
water, wastewater and other related services to an estimated 14 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