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AWK Unit to Upgrade Water System

Zacks Equity Research

American Water Works Company, Inc. (AWK) continues to invest substantially to upgrade its aging infrastructure. On this occasion, American Water announced that its unit Pennsylvania American Water will invest roughly $0.52 million to replace the water main in Lower Providence Township, Norristown, Pa.

Per the plan, the company will replace the aging and undersized pipe of nearly 2,700-feet with a new 12-inch ductile-iron water main along Middle School Drive located between Pond View Drive and Appledale Road, and along Appledale Road between Middle School Drive and Sunnyside Avenue.

Pennsylvania American Water plans to start the aforesaid activities by this week and finish it by December, subject to weather conditions. The company intends to start final paving restoration either in Dec 2013 or in spring 2014.

The infrastructure upgrade will enable Pennsylvania American Water to improve reliability of water supply and strengthen the capability of its utility assets. Further, this project will enhance water flow capacity for firefighting activities in the locality.

The U.S. government continues to impose several mandates to maintain reliability in water supply. As per the U.S. Environmental Protection Agency’s report, the U.S. utility providers need to invest $384 billion through 2030 for restoring and upgrading drinking water system.

We appreciate American Water’s steady efforts to abide by these regulations. On Nov 19, 2013, the company’s subsidiary, Iowa American Water, announced that it has completed numerous water main projects in the Iowa Quad Cities, with a total investment of approximately $1.25 million.

We remind investors that American Water invested $665.3 million under its capital expenditure program during the first nine months of 2013. The company intends to invest approximately $285 million in the last three months of 2013.

Subsequently, the aforesaid initiatives will enable the company to provide uninterrupted water supply to its customers, improve consumer safety and maintain government utility standards.

American Water currently has a Zacks Rank #3 (Hold). However, other water utilities that are currently performing well include Middlesex Water Co. (MSEX) with a Zacks Rank #1 (Strong Buy), and Connecticut Water Service Inc. (CTWS) and California Water Service Group (CWT), each with a Zacks Rank #2 (Buy).

Read the Full Research Report on CTWS
Read the Full Research Report on MSEX
Read the Full Research Report on AWK
Read the Full Research Report on CWT

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