Water Rate Hike Praised

The New Jersey Board of Public Utilities’ $30 million rate increase for New Jersey-American Water Co. is a credit positive for parent American Water Works Co., Moody’s Investors Service said, because it will help improve operating cash flow.

Moody’s rates the investor-owned utility Baa2 with a stable outlook.

American Water Works is the largest regulated, publicly traded water utility in the United States, providing an estimated 15 million people with drinking water across 30 states and two Canadian provinces

“As a result of the order, we expect NJ-AWC to produce a ratio of cash flow to debt of more than 20% for 2012, compared with 19% for the 12-month period ending in September 2011, despite the financing demands of an ongoing capital plan,” Moody’s said in a report.

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