Kentucky American Water, a subsidiary of American Water Works Company, received approval from the Kentucky Public Service Commission on December 17, 2025 for a new rate structure that will raise its annual revenue by approximately $18.2 million. The approval follows a $212 million investment in water‑treatment and distribution‑system upgrades that the company completed since its last rate filing on May 16, 2025. The new rates take effect on December 16, 2025 and are expected to lift the average monthly residential bill by roughly $2 for a typical 3,900‑gallon customer, although a separate source reports a $6.82 increase for a 3,940‑gallon usage level, highlighting a range of bill impacts across the customer base.
The rate increase also expands Kentucky American Water’s authorized rate base from $489.4 million to $667.0 million, a jump that reflects the company’s decision to terminate the Qualified Infrastructure Program rider and incorporate those costs into the base rate. The $18.2 million revenue lift is less than the nearly $27 million increase the company originally requested, a common outcome in utility rate cases where regulators balance affordability with capital‑recovery needs.
Kentucky American Water reports serving roughly 527,000 customers across 13 counties, a figure that contrasts with an alternative source citing 139,000 customers in 14 counties. The company’s management emphasizes that the rate case supports ongoing infrastructure modernization while maintaining affordability for its large customer base. The average bill increase of about $2 per month is modest relative to the company’s overall revenue, but the higher end of the range—$6.82 for a 3,940‑gallon user—illustrates the potential impact on higher‑usage households.
For American Water Works Company, the rate approval contributes to a broader strategy of disciplined capital deployment and rate‑base expansion. In the twelve months ending September 30, 2025, the parent company reported revenue of $5.070 billion, up 12.29% year‑over‑year, and an EPS of $1.94, beating the consensus estimate of $1.90. The company’s guidance for 2025 EPS remains in the $5.70–$5.75 range, and it has reaffirmed its 2026 EPS guidance of $6.02–$6.12, signaling confidence in continued growth and profitability.
Rob Burton, president of Kentucky American Water, said the company is “committed to providing safe, clean, reliable and affordable water service to over half a million people in portions of 13 counties.” He added that the company’s “proactive investment strategy allows us to maintain high service standards and ensure regulatory compliance, benefiting all involved parties.”
Analysts remain neutral on the rate approval, noting that while the decision supports the company’s capital‑investment recovery, broader market concerns about valuation and technical indicators temper enthusiasm. The rate case is viewed as a positive operational milestone that reinforces American Water Works’ long‑term rate‑base growth targets of 8% to 9% and its commitment to delivering consistent earnings and dividends to shareholders.
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