Market Overview

Aqua Pennsylvania files first rate request since 2011

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Water would be priced at less than 2 cents per gallon

Aqua Pennsylvania Inc. filed an application with the Pennsylvania Public
Utility Commission today, for the first time in nearly seven years,
requesting an increase in water and wastewater rates for its customers.
The primary reason for the request is the recovery of $2.2 billion it
has invested in infrastructure, including upgrades to its distribution
and treatment systems to improve drinking water quality and service
reliability throughout its water and wastewater operations.

The company's request would increase a residential water bill for a
typical customer using 4,080 gallons per month from $59.85 to $69.07, an
increase of $9.22 a month (30 cents a day). Aqua is also asking for
various increases for its wastewater customers. Although Aqua is asking
that the new rates become effective Oct. 16, 2018, the PUC can suspend
such requests for up to nine months for a complete investigation and
analysis of Aqua's proposal.

"We have replaced more than 800 miles of aging water main, as well as
valves, service lines and more than 19,000 fire hydrants throughout our
approximately 5,800-mile distribution system," said Aqua Pennsylvania
President Marc Lucca, who added that a significant portion of Aqua's
capital program has been dedicated to upgrading and rehabilitating
treatment plants and wells, including the installation of equipment to
meet new, more stringent water quality requirements for increased
sustained disinfection. It has also upgraded pumping stations, water
storage tanks and standby electrical systems.

Improvements to wastewater operations include collection system
replacement and renewal, treatment plant rehabilitation to ensure
reliability and high quality of the treated water that is returned to
the environment, upgrades to electrical systems that have improved
efficiency, and the purchase and installation of generators to ensure
continued service during power outages.

"All of this work is to help ensure our customers and communities have
reliable water and wastewater service," Lucca said. "Because we're
conscious of family and commercial budgets, we've been able to minimize
increases in expenses since the last rate request in 2011 to an annual
average of less than 1 percent per year."

With approximately 450,000 water and wastewater customers throughout
Pennsylvania, the company said its $2.2 billion of capital spending
since the last rate request amounts to an average investment of about
$4,855 per customer.

If the PUC were to grant the entire request, the typical Aqua
residential customer would still be able to have a day's worth of water,
approximately 134 gallons, for approximately $2.27— or less than two
cents per gallon for quality water delivered directly to the customer's
home. This usage includes cooking, drinking, showering, washing clothes
and dishes, and sanitation.

According to the American Water Works Association, over the next 20
years, the nation's water systems need to invest about $1 trillion in
its aging infrastructure.

"Aqua has taken a proactive approach to these nationwide problems by
prioritizing and systematically replacing a small percentage of our
distribution systems annually, and maintaining and upgrading our
treatment plants and other facilities on a regular basis," Lucca said.

The requested increase in annual revenue for Aqua, which serves nearly
1.4 million people throughout the state, is $71.8 million.

Aqua Pennsylvania serves approximately 1.4 million people in 32 counties
throughout the Commonwealth of Pennsylvania. Visit AquaAmerica.com
for more information, or follow Aqua on Facebook at facebook.com/MyAquaAmerica
and on Twitter at @MyAquaAmerica.

WTRF

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