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AWK Upgrades Town of Dixon Water Sys

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American Water Works Company’s (AWK - Free Report) unit Iowa American Water has started to drill a well and also intends to install a booster pump station in its newly acquired water system of the Town of Dixon. The operations will come online in Sep 2013.

The water drawn from the well will significantly reduce nitrate levels, thereby bringing the system in compliance with federal environmental norms and state requirements. The booster pump installed at the system would help to increase water pressure.

A few days back, American Water Works acquired the Town of Dixon Water System. This acquisition will enable the company to serve 104 more customers in northwest Davenport.

It is evident that American Water Works is currently following a steady organic as well as inorganic growth strategy to expand its operations. During the first six months of 2013, the company spent $429.8 million under its capital spending program.

In Jul 2013, the company started the development of a new 250,000-gallon water storage tank on Crestview Drive. In May 2013, American Water Works completed its $101 million Pittsburg System Upgrade project.

On the inorganic expansion front, American Water Works’ unit Pennsylvania American Water acquired a municipal wastewater system in Beaver County for $1.8 million. The company will add 500 customers in Koppel Borough and a portion of Big Beaver Borough from this acquisition.

The infrastructure addition and upgrade program will enable American Water Works to provide uninterrupted water to its customers and strengthen system competence. These factors will subsequently improve reliability and public safety, while maintaining government water quality regulations.

American Water Works is presently waiting for rate case decisions in five states in which it operates. A favorable decision will enable American Water Works to recoup its earlier invested funds. Also, we believe the bill-hike approval will further give confidence to the utilities to invest more on infrastructure upgrades.

Voorhees, N.J.-based American Water Works was founded in 1886. The company serves around 14 million people with water and water related services.

American Water Works currently has a Zacks Rank # 3 (Hold). Other water utilities, which are doing well include Connecticut Water Service Inc. (CTWS - Free Report) with a Zacks Rank #1 (Strong Buy), and Consolidated Water Co. Ltd. (CWCO - Free Report) and SJW Corp. (SJW - Free Report) , each with a Zacks Rank #2 (Buy).

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