Iowa American Water Implements Interim Rates as Iowa Utilities Board and Office of Consumer Advocate Review Company’s Rate Increase Request

Effective today, Iowa American Water will implement an interim (that is, temporary) rate increase as part of its rate increase application filed April 29, 2016 with the Iowa Utilities Board (“IUB”). The interim increase, which affects the average residential customer bill by about $2.33 or 7 percent, allows Iowa American to begin collecting a portion of its rate increase while the IUB and Office of Consumer Advocate (“OCA”) review the full filing.

Iowa American Water’s ongoing infrastructure investments are the main drivers behind the Company’s rate increase request. Since the last increase request in 2013, Iowa American Water will have invested approximately $38 million by the end of 2016 to improve its water treatment and delivery systems in Clinton and the Iowa Quad Cities. All these investments in local water infrastructure systems enhance water quality, service reliability and fire protection for customers, while keeping the cost of water service for most local households at about one cent per gallon.

“Since our last rate case, Iowa American Water has continued to implement efficiencies and best practices throughout the business to reduce our operations and maintenance expenses,” said Iowa American Water President Randy Moore. “This has enabled us to reduce our operating expenses through December 2015 by almost 10 percent or $1.7 million.”

Because the IUB can take up to ten months to render a decision on the case, Iowa American Water is allowed under state law to make interim rates effective while its request is fully reviewed. Interim rates are subject to refund with interest if the IUB approves a final increase that is less than the interim rate increase. Opportunities for public comment and public hearings on the Company’s application for rate increase are also part of the process, under the direction of the IUB. An IUB decision on final rates must be issued by the end of February 2017.

The interim rates will generate about $2.1 million in additional annual revenue.

The following chart shows the monthly impact of the interim rate order to the average Iowa American Water customer in each customer class:

Consumer comment meetings have been scheduled to be held on the following dates and times:

• Bettendorf: Monday, May 23, 2016, 4:30 p.m. – Scott Community College Student Life Center, Room 2300, 500 Belmont Road, Bettendorf, Iowa
• Clinton: Tuesday, May 24, 2016, 5:30 p.m. – Clinton Community College Technology Center, Room 10, 1951 Manufacturing Drive, Clinton, Iowa
• Dixon: Tuesday, June 14, 2016, 5:30 p.m. – American Legion, 406 Davenport Street, Dixon, Iowa

In addition, the IUB in the near future will issue an order setting the date, time and place of the hearing on Iowa American Water’s application. Further Information concerning the consumer comment meetings and the hearing can be found on the IUB’s website: https://iub.iowa.gov .

About Iowa American Water

Iowa American Water, a subsidiary of American Water Works Company, Inc. (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 200,000 people. American Water is the largest and most geographically diverse publicly traded U.S. water and wastewater utility company. Marking its 130^th anniversary this year, the company employs 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com.