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American Water Works Company’s AWK arm, Illinois American Water, announced plans to invest $37 million in the Lincoln water system. This includes a new South Water Treatment Plant, a new water tower and water main replacements.
Water Infrastructure Additions
The new water treatment plant will have a new pump station to draw source water for treatment and is likely to start operations by early 2023. The new treatment plant will have a delivery capacity of 5 million gallons a day as well as new electrical and security systems to protect the plant if an emergency occurs.
Along with the plant, construction of a new elevated water tower with a capacity of 1 million gallons began last year and is likely to be completed this fall. This will not only ensure the reliability and water pressure, but also provide fire protection. The work of water main replacements is also progressing. The utility plans to replace more than 2,200 feet of aging water main on Welch Drive, Portland Drive and DeBruler Drive.
Investment in Infrastructure Strengthening
llinois American Water is investing on a regular basis to upgrade and expand its existing water as well as wastewater infrastructure. Earlier this month, the company’s unit had announced plans to invest $3 million and $10 million to ensure high-quality potable water services in Pekin's Water System and Peoria Water System’s distribution area, respectively.
Recently, the company’s other subsidiary— Missouri American Water—invested $1.3 million to replace 3,100 feet of aging water mains along Big Bend Boulevard in Webster Groves. It also plans to invest $2 million to upgrade 3,700 feet of aging water mains in its service territories.
Need For Recurring Investments
Aging of the water pipelines is a primary reason for leakages and results in the wastage of potable water. Timely repair and maintenance of aging pipelines along with expansion of the existing water infrastructure are important to meet rising demand. Thus, aging of water and wastewater infrastructure as well as water main failures are the biggest concerns for water utilities.
The only solution to the aforementioned problem is to update and replace the aging water infrastructure, which requires heavy funding. Per the Water and Wastewater Equipment Manufacturers Association, an estimated $750 billion investment is necessary to maintain and expand drinking water and wastewater service to meet demand over the next 20 years. American Water continues to make investments in its infrastructure to upgrade, enhance and maintain the same. The company plans to invest $10.4 billion in the 2021-2025 time period and $22-$25 billion in the next decade.
Other water utility providers are also investing vigorously to keep their infrastructure up-to-date, thereby offering reliable service to their customers. Middlesex Water Company MSEX recently announced an infrastructure replacement activity—RENEW 2021 —through which it aims to invest $10.2 million beginning in April. This investment will enable the utility to modernize drinking water infrastructure in the Borough of Metuchen, through replacement of 24,800 linear feet of water main, as well as service lines, valves and fire hydrants. RENEW 2021 is part of Middlesex Water’s overall Water for Tomorrow® Program, which consists of nearly $295 million in various projects planned through 2022.
Essential Utilities WTRG is also making regular investments to upgrade the existing water and wastewater systems. Its long-term plan is to invest nearly $3 billion through 2023 to rehabilitate and strengthen water as well as natural gas pipeline systems. Another water utility, Global Water Resources GWRS is making acquisitions and the necessary investments to expand as well as strengthen operations along with upgrade the acquired assets for providing efficient services to customers.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 31.2% in the past year compared with the industry’s rise of 22.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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