Business Context and Reporting Period
This Form 8-K Current Report was filed by American Water Works Company, Inc. on July 5, 2022, covering events occurring on July 1, 2022. The filing details the submission of general rate case applications by two wholly owned subsidiaries: California-American Water Company and Missouri-American Water Company.
Key Financial Metrics and Requests
The filing does not report historical revenue, profit, cash flow, or debt metrics for the company. Instead, it outlines specific revenue increase requests for future periods:
- California-American Water: Seeking a 2024 revenue increase of $57.1 million and a total increase of $99.0 million over the 2024–2026 period.
- Missouri-American Water: Seeking annualized incremental revenue of $116.2 million based on a requested return on equity of 10.5% and an equity capital structure of 50.4%.
Material Changes and Regulatory Actions
The primary material event is the filing of rate applications with state regulatory bodies:
- California: Application filed with the California Public Utilities Commission (CPUC) on July 1, 2022. If approved, new rates would take effect January 1, 2024.
- Missouri: Request filed with the Missouri Public Service Commission (MoPSC) on July 1, 2022. If approved, new rates are expected to take effect in mid-2023.
Both requests exclude proposed reductions for excess accumulated deferred income taxes (EADIT) resulting from the Tax Cuts and Jobs Act of 2017 ($1.3 million in 2024 for California; $11.1 million for Missouri).
Guidance, Outlook, and Risks
The filing contains forward-looking statements regarding the potential approval and timing of new rates. Management cautions that actual results may differ materially due to several risks:
- Terms of settlement agreements or final orders from the CPUC and MoPSC.
- Timing of rate implementation.
- Regulatory, legislative, or municipal actions affecting the water and wastewater industries.
- General economic, financial, and political factors.
The company states it has no obligation to update these forward-looking statements except as required by federal securities laws.
Investor Verification Checklist
- Verify the final approved revenue increases versus the requested amounts ($57.1M/$99.0M for California; $116.2M for Missouri).
- Confirm the actual effective dates of the new rates (targeted Jan 1, 2024, for California and mid-2023 for Missouri).
- Monitor regulatory decisions regarding the EADIT reductions excluded from the initial requests.
- Review the final return on equity and capital structure approved by the MoPSC compared to the requested 10.5% and 50.4%.