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Essential Utilities' (WTRG) Unit Secures $77.5M Loan for Upgrade
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Essential Utilities, Inc.’s (WTRG - Free Report) unit Aqua Pennsylvania has secured $77.5 million in low-interest loans from the Pennsylvania Infrastructure Investment Authority (PENNVEST). This loan will fund 21 projects over the next three years to replace old water mains and install new fire hydrants.
The funds will assist in the upgradation of 133,400 feet of water mains and the installation of about 80 new fire hydrants. The reduced water loss will lower operating costs. The installation of new fire hydrants will enhance public safety. Overall, these developments will improve reliability, resiliency and safety and provide an uninterrupted water supply to its consumers even during harsh weather conditions.
Continuous Investment – A Dire Need
The existing water supply system and infrastructure are getting old. The company needs to invest regularly to upgrade and replace its aging pipelines to prevent leakages and service interruptions as well as reduce the possibility of water contamination. The upgrades will help Aqua Pennsylvania provide a consistent and safe water supply to its consumers.
Investment in Water Industry
The U.S. water infrastructure is getting old and requires immediate replacement. A substantial investment is the need of the hour to improve the water infrastructure. Per the U.S. Environmental Protection Agency, an estimated $896 billion investment is necessary to maintain and expand the drinking water and wastewater service to meet demand over the next 20 years. Several of Essential Utilities’s peers have also been investing in U.S. water infrastructure.
American Water Works (AWK - Free Report) is systematically investing across its service region in the United States. The company aims to invest $3.1 billion in 2024, a major portion of which will be utilized for infrastructure improvements in regulated businesses. AWK aims to invest in the range of $16-$17 billion from 2024-2028 and $34-$38 billion in the 2024-2033 period.
American States Water Company (AWR - Free Report) is investing regularly in upgrades to make its infrastructure strong and resilient. It invested $175.7 million in 2023 and aims to invest $611.4 million during the 2025-2027 period.
California Water Service Group (CWT - Free Report) invested $383.7 million in capital improvements during 2023. In the first quarter of 2024, the company made capital investments of $109.8 million, and the estimated capital expenditure for 2024 is $380 million.
Price Performance
Shares of Essential Utilities have gained 16.6% in the past three months, compared with the industry’s 14.3% growth.
Image: Bigstock
Essential Utilities' (WTRG) Unit Secures $77.5M Loan for Upgrade
Essential Utilities, Inc.’s (WTRG - Free Report) unit Aqua Pennsylvania has secured $77.5 million in low-interest loans from the Pennsylvania Infrastructure Investment Authority (PENNVEST). This loan will fund 21 projects over the next three years to replace old water mains and install new fire hydrants.
The funds will assist in the upgradation of 133,400 feet of water mains and the installation of about 80 new fire hydrants. The reduced water loss will lower operating costs. The installation of new fire hydrants will enhance public safety. Overall, these developments will improve reliability, resiliency and safety and provide an uninterrupted water supply to its consumers even during harsh weather conditions.
Continuous Investment – A Dire Need
The existing water supply system and infrastructure are getting old. The company needs to invest regularly to upgrade and replace its aging pipelines to prevent leakages and service interruptions as well as reduce the possibility of water contamination. The upgrades will help Aqua Pennsylvania provide a consistent and safe water supply to its consumers.
Investment in Water Industry
The U.S. water infrastructure is getting old and requires immediate replacement. A substantial investment is the need of the hour to improve the water infrastructure. Per the U.S. Environmental Protection Agency, an estimated $896 billion investment is necessary to maintain and expand the drinking water and wastewater service to meet demand over the next 20 years. Several of Essential Utilities’s peers have also been investing in U.S. water infrastructure.
American Water Works (AWK - Free Report) is systematically investing across its service region in the United States. The company aims to invest $3.1 billion in 2024, a major portion of which will be utilized for infrastructure improvements in regulated businesses. AWK aims to invest in the range of $16-$17 billion from 2024-2028 and $34-$38 billion in the 2024-2033 period.
American States Water Company (AWR - Free Report) is investing regularly in upgrades to make its infrastructure strong and resilient. It invested $175.7 million in 2023 and aims to invest $611.4 million during the 2025-2027 period.
California Water Service Group (CWT - Free Report) invested $383.7 million in capital improvements during 2023. In the first quarter of 2024, the company made capital investments of $109.8 million, and the estimated capital expenditure for 2024 is $380 million.
Price Performance
Shares of Essential Utilities have gained 16.6% in the past three months, compared with the industry’s 14.3% growth.
Image Source: Zacks Investment Research
Zacks Rank
Essential Utilities currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.