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American Water's (AWK) Unit Invests $6M in UV Technology

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American Water Works (AWK - Free Report) unit, Illinois American Water, recently announced that it has invested $6 million to set up ultraviolet (UV) disinfection at the Granite City water treatment plant.

Notably, three new UV reactors have been installed, and these are capable of treating up to 15 million gallons of water a day.

American Water’s Prospects in UV technology

Limited access to potable water and aging of water and wastewater infrastructure are key challenges for the U.S. water industry. According to DigDeep, at present about 2.2 million people don't have running water across the United States. The problem is expected to become more severe in the coming years unless investment is made in the aging water infrastructure.

Water obtained from natural sources such as dams, streams, bores and rainwater tanks may contain microorganisms that can pose a risk to health. American Water’s UV technology is effective in obliterating the infection-causing microorganisms, and adds another layer of protection for customers. When used to treat drinking water, UV disinfection addresses chlorine-resistant pathogens and microorganisms that could be present in surface water sources. The Granite City water treatment facility uses the Mississippi River as its water source and provides safe drinking water to its customers

Investment Essential in Water Space

To provide uninterrupted supply of potable water, nearly 2.2 million miles of underground pipelines work in tandem with water sources, water treatment plants and storage tanks. Per the Water and Wastewater Equipment Manufacturers Association, an estimated $750 billion investment is necessary to maintain and expand drinking water as well as wastewater services to meet the demand over the next 20 years.

Water utilities are introducing new technology to provide clean and safe drinking water to their customers. Consolidated Water (CWCO - Free Report) utilizes the Reverse Osmosis Technology, one of the most advanced technologies to convert seawater to potable water at all water treatment plants it constructs and operates.

American Works will invest $10.3 million to $10.5 million between 2021 and 2025. In 2021, the company will make capital investments of $1.9 billion, with a major portion to be utilized for infrastructure improvements in regulated businesses.

In addition, investor-owned water utilities like California Water Service Group (CWT - Free Report) are making substantial investments on an annual basis to upgrade as well as maintain infrastructure. Another utility, Essential Utilities (WTRG - Free Report) plans to invest $3 billion between 2021 and 2023 to fortify water and natural gas operations and efficiently serve the expanding customer base.

Price Movement

In the past 12 months, American Water’s shares have gained 20.8% compared with the industry’s growth of 9.9%.

Zacks Investment ResearchImage Source: Zacks Investment Research


Zacks Rank

American Water currently carries a Zacks Rank #3(Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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