Company: AWK
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001410636-25-000173
Chunk: 167

Company: American Water Works Company, Inc.
Filing Date: 2025-10-29
Form: 10-Q
Item: Part I, Item 2
Chunk 167
---
 2025, operation and maintenance expense decreased $4 million, primarily due to reduced employee-related costs partially offset by increased costs associated with MSG and CSG projects.

For the nine months ended September 30, 2025, operation and maintenance expense increased $7 million, primarily due to increased costs associated with MSG and CSG projects partially offset by reduced employee-related costs.

Interest expense

For the three and nine months ended September 30, 2025, interest expense increased $11 million and $20 million, respectively, due to higher average commercial paper borrowings.

Legislative Updates

During 2025, the Company’s regulatory jurisdictions enacted the following legislation that has been approved and is effective as of October 29, 2025:

•California passed Senate Bill 219, which amends the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act, to allow the California Air Resources Board until July 1, 2025, to issue implementing regulations, including reporting requirements for Scope 3 emissions. Legislation was signed by the Governor on September 27, 2024, and became effective January 1, 2025.

•Virginia passed Senate Bill 850, which would permit a water or wastewater utility to petition the VSCC for the approval of an eligible infrastructure replacement and enhancement plan and accompanying recovery mechanism that allows for recovery of eligible infrastructure costs outside of a base rate case. Legislation was signed by the Governor on March 24, 2025, and became effective on July 1, 2025.

•Indiana passed Senate Bill 426, which changes the timing of recovery to allow for deferred depreciation from in-service date and post in-service carrying costs and authorizes the IURC to approve mechanisms to allow utilities to invest in and earn on acquired utility assets. The language also provides critical protections from lawsuits when utilities are meeting applicable water quality standards. Legislation was signed by the Governor on April 3, 2025, and became effective on July 1, 2025.

•Missouri passed Senate Bill 4, which provides that beginning July 1, 2026, water, sewer, and gas utilities may request the use of a future test year in a general rate case. This statute provides that at the end of the future test year, utilities must reconcile rate base and certain expenses, including annualized depreciation expense, income tax expense, payroll expense, employee benefits except for pensions and other post-retirement benefits, and rate case expenses, within 45 days to the MoPSC