American Water Works Co. Inc. disclosed a surprising risk to its business in the prospectus to go public it filed today the Securities & Exchange Commission: water conservation.
The Voorhees company matter-of-factly points out that residential water use is going down thanks to "more efficient household fixtures and appliances among residential consumers, combined with declining household sizes in the United States," the filing said.
"For example, areas with higher per customer residential water use (primarily due to lawn irrigation) will generally have a greater projected decline in the long term since the conservation potential is greater."
The company's bottom line could be hurt if rate increases don't offset the decline in usage, the filing says.
To be fair, American Water Works isn't against conservation. In fact, its Web site says. "using water wisely makes the best use of this important resource and can reduce your household water bill and help protect the environment."
