Connecticut Water Service to invest $55.1M for infrastructure upgrades in 2015
Connecticut Water Service continues with systematic investments for upgrading its utility infrastructure. The company's board of directors has approved a total investment of $55.1 million in 2015, which is 20.8% higher than the projected capital spending plan of $45.6 million in 2014.
Nov. 11, 2014 -- Connecticut Water Service Inc.(CTWS) continues with systematic investments for upgrading its utility infrastructure. The company's board of directors has approved a total investment of $55.1 million in 2015, which is 20.8% higher than the projected capital spending plan of $45.6 million in 2014.
Connecticut Water has segregated its 2015 capital investment program into two parts: $47.6 million for the company's regulated water utility subsidiary, The Connecticut Water Company, and the rest for its unit, Maine Water Company.
The company will invest $16.6 million in replacing aging pipeline systems and upgrading infrastructure through the Water Infrastructure and Conservation Adjustment (:WICA) program in Connecticut and the Water Infrastructure Surcharge (:WISC) program in Maine.
In addition, $17.9 million will be spent for improvement of the treatment plant and lab. A major part of this will be utilized to upgrade the Rockville Water Treatment Plant and to execute the new Dissolved Air Flotation technology.
The gradually increasing level of capital expenditure reflects Connecticut Water maintaining a disciplined investment plan to improve its utility infrastructure. In 2013, the company had invested $32.7 million in capital projects. These initiatives will allow the company to improve reliability and public safety besides conforming to environmental regulations.
In Sep 2014, the Connecticut Public Utilities Regulatory Authority (PURA) permitted a WICA of 1.59%, which was implemented in Oct 2014. Meanwhile, Maine Water executed the WISC in 6 of its 10 divisions and expects to implement it in most of its remaining divisions by the end of 2014.
These approvals will help Connecticut Water to recoup the funds it had previously invested in infrastructure projects from the customers and encourage water utility companies to invest more in infrastructure development and replacement ventures.
Connecticut Water maintains a stable cash generating capacity, with operating cash flow increasing 9.9% year over year to $19.8 million during the first nine months of 2014. This will facilitate investments in infrastructure projects and regular dividend payments.
Connecticut Water currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include American States Water Company (AWR), Aqua America Inc. (WTR) and Artesian Resources Corporation (ARTNA), each carrying a Zacks Rank #2 (Buy).
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