Kentucky American Water Granted New Water Rates by Kentucky Public Service Commission

Rhea-AI Summary

Kentucky American Water (NYSE:AWK) received approval from the Kentucky Public Service Commission for new water rates effective December 16, 2025. The rates produce an annualized revenue increase of about $18.2 million and were driven by more than $212 million in water treatment and distribution system improvements completed since the prior filing. The average residential bill for a customer using 3,900 gallons/month will rise by approximately $2 per month. The company serves over half a million people in portions of 13 counties and highlights available customer assistance programs including payment plans, budget billing and the H2O Help to Others program.

Positive

• $212 million in system improvements completed
• Annualized revenue increase of $18.2 million
• Rate approval effective Dec 16, 2025
• Serves over 500,000 people across 13 counties

Negative

• Average residential bill increases by $2 monthly for 3,900 gallons
• Higher rates may raise affordability concerns for some customers

Key Figures

Annualized revenue increase $18.2 million PSC-approved Kentucky water rate increase

System improvements More than $212 million Water treatment and distribution investments since last rate filing

Monthly bill change $2 Average residential customer using 3,900 gallons/month

Residential usage basis 3,900 gallons/month Average residential consumption used in bill impact example

Population served Over 500,000 people Kentucky American Water customers across service area

Counties served 13 counties Kentucky American Water service footprint

Market Reality Check

$130.32 Last Close

Volume Volume 2,573,389 is modestly above 20-day average 2,379,758 (relative volume 1.08x). normal

Technical Price $132.72 is below the 200-day MA $140.08 and 14.65% under the 52-week high.

Peers on Argus

AWK was down 1.05% with key regulated utility peers also lower (e.g., WTRG -0.6%, AEE -0.9%, FE -1.06%), indicating broader defensive-sector softness rather than an isolated move flagged by momentum scanners.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 10	Drought conservation notice	Negative	+0.4%	Voluntary 10–15% water-use cut requested amid expanded drought watch.
Dec 09	Small system acquisition	Positive	+0.4%	Completed acquisition of Yerba Buena Water Company serving ~250 customers.
Dec 09	Plant upgrade completion	Positive	+0.4%	Finished multi-year upgrades at Metro East plant after $157M investment.
Dec 05	Mandatory conservation	Negative	-0.8%	Statewide mandatory conservation notice following drought warning in New Jersey.
Dec 05	Dividend declaration	Positive	+0.4%	Announced $0.8275 quarterly dividend continuing prior annualized increase.

Pattern Detected

Recent news tied to capital investment, acquisitions, and dividends generally aligned with modest positive price reactions, while drought- and conservation-related headlines saw more mixed responses.

Recent Company History

Over the past weeks, American Water has highlighted multiple growth and operational updates. A completed acquisition in California added about 250 customers, contributing to nine acquisitions in five years and over 13,000 new customers since 2020. Major plant upgrades in Illinois followed more than $157 million of investment, while drought-driven conservation notices in New Jersey and Pennsylvania underscored weather and regulatory exposure. A quarterly dividend of $0.8275 per share reinforced the income profile. Today’s Kentucky rate approval fits the pattern of regulated, investment-backed revenue growth.

Market Pulse Summary

This announcement details Kentucky PSC approval of new water rates that provide about $18.2 million in annualized revenue, tied to more than $212 million of treatment and distribution upgrades. It follows a broader strategy of capital investment and regulated rate recovery seen across recent filings and news. Investors may focus on how similar rate cases in other states progress, the scale and timing of future capital expenditures, and ongoing drought or conservation developments.

Key Terms

public service commission regulatory

"The Kentucky Public Service Commission (PSC) has approved new water rates..."

A public service commission is a government agency that oversees essential services like electricity, water, gas and sometimes transport or telecoms, acting like a referee who sets rules, approves rates and issues operating licenses. Investors watch its decisions because the commission can raise or lower what customers pay, require costly upgrades, or limit a company's ability to expand, directly affecting utility revenues, profits and investment risk.

AI-generated analysis. Not financial advice.

Increase driven by more than $212 million in system improvements

LEXINGTON, Ky., Dec. 17, 2025 /PRNewswire/ -- The Kentucky Public Service Commission (PSC) has approved new water rates for Kentucky American Water. The approved rates represent a total annualized revenue increase of approximately $18.2 million.

The company's rate request was filed on May 16, 2025, and was primarily driven by more than $212 million in water treatment and distribution system improvements made since the company's last rate filing. These improvements help ensure Kentucky American Water continues to provide safe, clean, reliable and affordable drinking water service to our customers and supports economic development in our communities. 

The new rates are effective as of December 16, 2025. With the approved rate increase, the average monthly bill for residential water customers using an average of 3,900 gallons per month will increase by approximately $2. 

"Kentucky American Water is committed to providing safe, clean, reliable and affordable water service to over half a million people in portions of 13 counties," said Rob Burton, president of Kentucky American Water. "Our long-term, efficient and consistent approach to capital investment enables us to achieve the high level of water service our customers expect and deserve while also helping ensure compliance with state and federal regulations."

Customers will be informed of the approved rates by mail and through the company's website at www.kentuckyamwater.com.

Kentucky American Water offers customer assistance programs that include payment plans, budget billing and, for income-eligible customers, the company's H2O Help to Others customer assistance program. More information can be found by clicking the Customer Assistance Program link under Customer Service & Billing on the company's website.

About American Water

American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people with regulated operations in 14 states and on 18 military installations. American Water's 6,700 talented professionals leverage their significant expertise and the company's national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.

About Kentucky American Water 

Kentucky American Water, a subsidiary of American Water, is the largest regulated water utility in the state, with 150 dedicated employees working to provide safe, clean, reliable and affordable water and wastewater services to approximately 527,000 people.

For more information, visit Kentucky American Water's website and join Kentucky American Water on Facebook, X, Instagram and LinkedIn.

AWK-IR

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SOURCE American Water

FAQ

When do the new Kentucky American Water (AWK) rates take effect?

The new rates are effective on December 16, 2025.

How much additional annual revenue will Kentucky American Water (AWK) collect from the rate change?

The approved rates represent an approximately $18.2 million annualized revenue increase.

Why did Kentucky American Water (AWK) request a rate increase in 2025?

The request was primarily driven by more than $212 million of water treatment and distribution system improvements.

How much will the average residential AWK bill change for 3,900 gallons per month?

The average monthly bill will increase by about $2 for a customer using 3,900 gallons.

How many customers does Kentucky American Water (AWK) serve in the affected area?

Kentucky American Water serves over half a million people in portions of 13 counties.

What customer assistance options does Kentucky American Water (AWK) offer after the rate change?

The company offers payment plans, budget billing, and the income‑eligible H2O Help to Others assistance program.