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American Water Unit Gets Rate Hike Nod, Supports Ongoing Investments
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Key Takeaways
AWK unit, West Virginia American Water, won PSC approval for new water rates, effective March 1, 2026.
AWK approved rates to increase annual revenues by $20.5M; average water and wastewater bills rise $6-$7.
AWK shares rose 0.6% in the past month against the water utility industry's 1.1% loss.
American Water Works (AWK - Free Report) unit, West Virginia American Water, received approval from the West Virginia Public Service Commission for new water rates effective March 1, 2026.
Per the approval, new rates will increase the total revenues of the company by $20.5 million annually. Effective March 1, 2026, residential water customers using 3,000 gallons per month will see their average bill increase by nearly $6 per month, while residential wastewater customers will see their average bill rise by around $7 per month.
Here's Why Rate Hikes Are Essential for Utilities
No doubt, the surge in rates increases the utility bills of consumers and adds to their financial burden. Having said that, rate hikes are essential for the proper maintenance and upgrade of infrastructure, which allows the utilities to meet the rising demand from their customers efficiently.
Utility operations are capital-intensive, and the company operating in this sector requires continuous funds for infrastructure development. Rate hikes from the commission allow the utilities to recoup infrastructure investments and continue the process over the long-run.
The U.S. water and wastewater infrastructure is aging, with frequent water main breaks reported by the American Society of Civil Engineers. The Environmental Protection Agency estimates that $1.25 trillion in investments will be needed over the next 20 years to maintain and upgrade drinking water, wastewater, and stormwater systems. Infrastructure improvements help utilities meet growing demand and reduce leaks, accidents and water loss.
Water Utilities Benefit From Rate Revision
The regulated water utilities approach their respective commission for rate hikes to recoup the investments. Apart from American Water Works, the following water utilities received approval for rate hikes.
American States Water (AWR - Free Report) unit, Golden State Water Company, on Jan. 12, 2026, received approval from the California Public Utilities Commission (“CPUC”) for second-year rate increases, effective Jan. 1, 2026. Approved rates for regulated utilities are projected to increase revenues, net of supply costs, by $32 million.
California Water Service Group’s (CWT - Free Report) unit, California Water Service, on Dec. 29, 2025, received approval from the CPUC for a temporary interim rate revision, effective Jan. 1, 2026. The approved rate for regulated utilities provides a clear path for revenue and earnings growth, allowing the company to invest in infrastructure and maintain reliable service.
Share Price Movement of AWK
In the past month, the stock has inched up 0.6% against the industry’s 1.1% decline.
Image Source: Zacks Investment Research
AWK’s Zacks Rank
American Water Works currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for CWCO's 2026 earnings is pegged at $1.57, suggesting 25.6% year-over-year growth. The dividend yield for the company is expected to be 1.63%.
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American Water Unit Gets Rate Hike Nod, Supports Ongoing Investments
Key Takeaways
American Water Works (AWK - Free Report) unit, West Virginia American Water, received approval from the West Virginia Public Service Commission for new water rates effective March 1, 2026.
Per the approval, new rates will increase the total revenues of the company by $20.5 million annually. Effective March 1, 2026, residential water customers using 3,000 gallons per month will see their average bill increase by nearly $6 per month, while residential wastewater customers will see their average bill rise by around $7 per month.
Here's Why Rate Hikes Are Essential for Utilities
No doubt, the surge in rates increases the utility bills of consumers and adds to their financial burden. Having said that, rate hikes are essential for the proper maintenance and upgrade of infrastructure, which allows the utilities to meet the rising demand from their customers efficiently.
Utility operations are capital-intensive, and the company operating in this sector requires continuous funds for infrastructure development. Rate hikes from the commission allow the utilities to recoup infrastructure investments and continue the process over the long-run.
The U.S. water and wastewater infrastructure is aging, with frequent water main breaks reported by the American Society of Civil Engineers. The Environmental Protection Agency estimates that $1.25 trillion in investments will be needed over the next 20 years to maintain and upgrade drinking water, wastewater, and stormwater systems. Infrastructure improvements help utilities meet growing demand and reduce leaks, accidents and water loss.
Water Utilities Benefit From Rate Revision
The regulated water utilities approach their respective commission for rate hikes to recoup the investments. Apart from American Water Works, the following water utilities received approval for rate hikes.
American States Water (AWR - Free Report) unit, Golden State Water Company, on Jan. 12, 2026, received approval from the California Public Utilities Commission (“CPUC”) for second-year rate increases, effective Jan. 1, 2026. Approved rates for regulated utilities are projected to increase revenues, net of supply costs, by $32 million.
California Water Service Group’s (CWT - Free Report) unit, California Water Service, on Dec. 29, 2025, received approval from the CPUC for a temporary interim rate revision, effective Jan. 1, 2026. The approved rate for regulated utilities provides a clear path for revenue and earnings growth, allowing the company to invest in infrastructure and maintain reliable service.
Share Price Movement of AWK
In the past month, the stock has inched up 0.6% against the industry’s 1.1% decline.
Image Source: Zacks Investment Research
AWK’s Zacks Rank
American Water Works currently carries a Zacks Rank #3 (Hold).
One better-ranked stock to consider from the same industry is Consolidated Water (CWCO - Free Report) , which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CWCO's 2026 earnings is pegged at $1.57, suggesting 25.6% year-over-year growth. The dividend yield for the company is expected to be 1.63%.