American Water Works Company, Inc. · NYSE:AWK
American Water Works — Tennessee American Water — Reg A Offering (May 2014)
12 slides from American Water Works's offering presentation, May 8, 2014
Slide 1: Tennessee American Water Customer Information Meetings
Tennessee American Water Customer Information Meetings Regarding Critical Funding for Local Water Infrastructure Surcharge May 8 & May 12, 2014
Slide 2: The Needs & Challenges of Local Water Infrastructure
The Needs & Challenges of Local Water Infrastructure • Across US - infrastructure is aging • American Society of Civil Engineers 2013 “Report Card” : $3.5 billion over next 20 years to renew and replace water infrastructure in Tennessee • The water industry is capital intensive • Repairing and rep
Slide 3: Old Pipes = Failing Pipes
Old Pipes = Failing Pipes 3
Slide 4: The Water Industry is the Most Capital Intensive of all Utility Types
The Water Industry is the Most Capital Intensive of all Utility Types Capital Invested per $1 of Revenue $4.00 More capital per revenue $3.50 $3.43 than all other utilities $3.00 Large Capital Investments needed over the next 20 $2.50 years mainly for distribution $2.00 $1.63 and collection syst
Slide 5: The Need to Invest Has Never Been Greater
The Need to Invest Has Never Been Greater Many in-service water pipes are over 100 years old In the United States, approximately seven billion gallons of treated drinking water are “lost” each day primarily due to system leaks—approximately 16% of the nation’s total daily drinking water producti
Slide 6: An Innovative Solution: Critical Funding Surcharge
An Innovative Solution: Critical Funding Surcharge • April 14, 2014 the Tennessee Regulatory Authority (TRA) approved Tennessee American Water’s alternative rate mechanism. • April 19, 2013 House Bill 191 enacted Encourages the TRA to consider an alternative rate mechanisms • The goal: Allow Ten
Slide 7: Four Parts to the Surcharge and What It Funds
Four Parts to the Surcharge and What It Funds • 1. Qualified Infrastructure Improvement Program “QIIP” Rider Replacement of water mains, fire hydrants, water meters, production plant structures, equipment, • 2. Economic Development Investment “EDI” Rider The capital investment and operational ex
Slide 8: Four Parts to the Surcharge and What It Funds (cont.)
Four Parts to the Surcharge and What It Funds (cont.) • 3. Safety and Environmental Compliance “SEC” Rider Capital investment and operational expenses related specifically to safety and environmental compliance. Includes water treatment processes. • 4. Expense Tracker for Production Costs and Othe
Slide 9: Benefits of an infrastructure surcharge program
Benefits of an infrastructure surcharge program: Continued investment in local water-wastewater system. Supports rate stability with gradual and incremental rate increases in line with inflation. Encourages ongoing improvements while holding down costs. Supports local economic development &
Slide 10: What this Means to the Customer's Bill
What this Means to the Customer’s Bill • There will be two line items on your bill: One is for the 3 Capital Riders One is for the Expense Tracker In terms of actual impact in terms of cents on the customer’s bill, for 2014 bills beginning April 15, the average Chattanooga customer will benefit
Slide 11: The process from year to year
The process from year to year • Tennessee American Water gives TRA list of capital projects in October with dollar amounts they will be spending on these projects in the following year • TRA gives approval for the incremental surcharge for customer’s bill to begin in January • In March, customer’s b
Slide 12: Conclusion
Conclusion • Water is still less than a penny a gallon, even with the surcharge. • Tennessee American Water isn’t waiting for problems to rise to the surface. Instead, it’s taking action now • With every payment, customers are helping to invest back into the system to assure that this most precious