Settlement Unanimously Approved in Pennsylvania American Water Rate Request

The Pennsylvania Public Utility Commission (PUC) today unanimously approved a settlement agreement that was previously filed between the company and the PUC Bureau of Investigation and Enforcement. This allows Pennsylvania American Water to raise its water and wastewater rates over a two-year period to reflect the continued investment made by the company to provide reliable, quality service. The company's rate request was driven by $1.64 billion of investment from 2019 through 2022 to replace and upgrade aging infrastructure.

"We are pleased the Commission has approved this settlement, which reflects carefully negotiated terms that balance the customer's interest with the much-needed ongoing investments made by the company," said Pennsylvania American Water President Mike Doran. "We also appreciate the diligence of all parties in the case that supported our company's robust commitments to additional consumer protections and customer hardship assistance in light of the economic challenges presented by COVID-19."

Through its H2O Help to Others Programtm, the company already provides financial assistance to low-income customers who qualify, including emergency grants, bill discounts and water-saving devices and education. The agreement approved today includes enhancements to the company's COVID-19 customer relief measures and low-income assistance programs, including waiving reconnection fees for customers at or below 200 percent of Federal Poverty Levels (FPL) for one year, waiving good faith payment requirements for H2O Help to Others grant eligibility for one year, and allowing self-certification of income for H2O Help to Others grants until Governor Wolf's COVID-19 emergency disaster declaration is rescinded. The company will also increase its annual contribution to the H2O Help to Others grant program from $450,000 to $600,000 and will expand its discount program for customers at or below 150 percent of FPL to include an additional 10 percent off the volumetric charges on their water bill and 30 percent off their total wastewater bill.

"Pennsylvania American Water is steadfastly committed to addressing the needs of our most vulnerable customers and being responsive to the current environment caused by the pandemic," Doran continued. "At the same time, we remain focused on meeting the current and future needs of our customers through sound infrastructure and public health protection by making prudent, ongoing investments to maintain and upgrade water and wastewater systems."

Effective Jan. 28, 2021, the monthly water bill for the average residential customer using 3,458 gallons per month will increase from the current charge of $57.85 to $61.92, and the average monthly residential wastewater bill will increase from $60.42 to $67.94. At the second phase-in on Jan. 1, 2022, the average monthly residential bills will increase to $62.80 for water and $78.41 for wastewater. These increases will be offset slightly in 2021 and 2022, reflecting tax savings that the company is flowing back to customers.

Doran concluded that the company's ongoing investments also support the economic health of the community during a time when local economies are challenged, as economic impact studies show that for every $1 million invested in water infrastructure, more than 15 total jobs are generated throughout the economy. The company recently announced that it delivered on its $400 million capital investment plan in 2020 despite the COVID-19 public health emergency. This level of investment supported 4,400 jobs in 2020 and will support more than 3,700 jobs in 2021 and 2022.

Today's PUC approval will result in a two-year total revenue increase of $70.5 million, which will be offset by annualized tax savings credits of $10.5 million in 2021 and 2022. The company filed its original rate request with the PUC in April 2020, seeking annual revenue increases totaling $138.6 million over two years.

About Pennsylvania American Water

Pennsylvania 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 2.4 million people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 7,000 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 46 states. American Water provides safe, clean, affordable and reliable water services to our customers to help make sure we keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.