Market Overview

Agreement Reached on Plan to Pass Federal Tax Savings to West Virginia American Water Customers

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West Virginia American Water announced today that its customers will
start seeing lower monthly bills as a result of the federal Tax Cuts and
Jobs Act of 2017 if a joint stipulation filed this afternoon is approved
by the Public Service Commission (PSC). The agreement was reached
between West Virginia American Water, Public Service Commission (PSC)
staff, Consumer Advocate Division (CAD), Kanawha County Commission, and
City of Charleston.

If approved as proposed, West Virginia American Water would reduce its
rates by an average of 3.5 percent effective September 1, 2018 to
reflect its federal tax savings from September 1 until the PSC sets new
rates in February 2019, which would provide a savings to customers of
approximately $2.2 million. For the average residential customer, the
monthly savings will be $1.60 for water and $2.17 for wastewater.

The company will apply the $3.2 million it collected from customers at
the old federal tax rate from January 1, 2018 to August 31, 2018, to pay
off several large one-time expenditures West Virginia American Water
incurred over the past four years. This pay-off will benefit customers
by lowering future rate increases and will specifically reduce the
company's current requested rate increase by approximately $500,000.

"The recent federal tax reform will save our customers an estimated $4.6
million annually, so we are passing these savings on to our customers
beginning next month. We also plan to use these savings to lessen rate
increases going forward," said President Brian Bruce of West Virginia
American Water. "Taxes are part of a utility's cost of providing service
and are typically incorporated into utility rates set by the PSC in
periodic rate cases, however, given the unique aspect of this federal
tax reform and its benefit to customers, we agreed with the parties in
this case to pass these benefits to customers sooner than the usual
process allows."

West Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state,
providing high-quality and reliable water services to approximately
530,000 people. With a history dating back to 1886, American Water is
the largest and most geographically diverse U.S. publicly traded water
and wastewater utility company. The company employs more than 7,100
dedicated professionals who provide regulated and market-based drinking
water, wastewater and other related services to over 14 million people
in 45 states and Ontario, Canada. American Water provides safe, clean,
affordable and reliable water services to our customers to make sure we
keep their lives flowing. For more information, visit
amwater.com
and follow American Water on
Twitter,
Facebook
and
LinkedIn.

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