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New Jersey American Water to Accelerate Water Infrastructure Renewal

New Jersey American Water typically spends about $150 million every year on capital projects. Approximately $40 million of that is spent updating the pipes, pumps and valves that make up its nearly 9,000 miles of underground infrastructure. However, as part of a new distribution system improvement program created recently by the New Jersey Board of Public Utilities, New Jersey American Water has submitted a foundational filing that, if approved, will result in more than 400 infrastructure projects across the state, representing an investment of more than $140 million and more than 900 construction jobs over the next 24 months. The announcement was made today at The Link between Water Infrastructure & a Healthy Business Climate summit held by the Somerset County Business Partnership.

The company’s foundational filing includes an engineering evaluation of the distribution system that discusses the need for accelerating the work, identifies issues the company faces in its distribution system, and actions being taken to extend the life of assets. The hundreds of proposed projects in New Jersey American Water’s filing range from a $5 million replacement of 1900s-era cast iron mains in Linden to a $13,000 replacement of a 2-inch diameter pipe section in Cherry Hill.

“This accelerated effort, which will be reviewed by BPU staff and the Division of Rate Counsel, will help address the EPA’s concern related to aging infrastructure and future compliance with the Safe Drinking Water Act,” said Suzanne Chiavari, vice president of Engineering at New Jersey American Water. “It will also allow us to work on necessary infrastructure upgrades and replacements at reasonable costs based on a replacement plan that bids the work, allowing the contractor more flexibility as to timing, which significantly lowers the cost, as compared to emergency replacements which are very expensive and disruptive to the communities we serve.”

The new program to accelerate renewal of the state’s aging water infrastructure was developed by the BPU following a lengthy public stakeholder process that lasted almost two years. The program’s infrastructure projects are funded through a Distribution System Improvement Charge that will appear as a separate item on customers’ bills. As filed, the initial DSIC for the BPU approved projects in New Jersey American Water’s foundational filing would go into effect before the summer of 2013.

New Jersey 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 2.5 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 15 million people in more than 30 states, as well as parts of Canada. More information can be found by visiting www.amwater.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are predictions based on American Water’s current expectations and assumptions regarding future events and may relate to, among other things, regulatory or legal developments, capital projects, rate adjustments and changes in general economic, business and financial market conditions. Actual results could differ materially because of factors such as the decisions of governmental and regulatory bodies, including the amount or effective date of rate changes; changes in laws, governmental regulations and policies, including environmental, health and water quality, and public utility regulations and policies; weather conditions, patterns or events, including drought or abnormally high rainfall; its ability to appropriately maintain current infrastructure and manage the expansion of its business; its ability to obtain permits and other approvals for projects; delays in project completion; changes in its capital requirements; cost overruns relating to improvements or the expansion of its operations.

For further information regarding risks and uncertainties associated with American Water’s business, please refer to American Water’s annual, quarterly and other SEC filings. The company undertakes no duty to update any forward-looking statement.

Contacts:

New Jersey American Water
Richard G. Barnes, 856-782-2371
richard.barnes@amwater.com
or
Peter A. Eschbach, 856-782-2316
peter.eschbach@amwater.com

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