Learn About American Water Works and Water Utilities

What American Water Works and Water Utilities Do

Water utilities are companies and public agencies responsible for delivering safe drinking water to homes, businesses, and institutions across the United States. American Water Works is the largest publicly traded water utility company in the nation, serving approximately 14 million people in 14 states and three Canadian provinces. The company operates through various regional subsidiaries with names like Pennsylvania American Water, New Jersey American Water, and Kentucky American Water.

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Water utilities perform several critical functions beyond simply turning on a tap. They source water from lakes, rivers, groundwater aquifers, and reservoirs. They treat this water to remove contaminants, bacteria, and other impurities according to federal and state standards. They maintain thousands of miles of underground pipes that distribute water throughout communities. They also manage wastewater treatment, which involves collecting used water from homes and businesses, treating it, and returning it safely to the environment.

The water utility industry includes different types of organizations. Large investor-owned utilities like American Water Works operate for profit and answer to shareholders. Municipal utilities are publicly owned and operated by local governments. Cooperative utilities are owned by the people they serve. Each type has different management structures, but all must meet the same quality and safety standards set by the Environmental Protection Agency (EPA) and state regulators.

American Water Works operates through a holding company structure, with the parent company overseeing multiple regional water companies. This structure allows the company to manage operations across different states while maintaining local expertise and customer relationships. The company serves customers ranging from rural communities with a few thousand residents to major metropolitan areas.

Practical Takeaway: Understanding your water provider—whether it is American Water Works or a municipal utility—helps you know who maintains your water system, where to contact them with questions, and what services they provide beyond water delivery.

How Water Treatment and Safety Standards Work

Water treatment is a multi-stage process designed to remove harmful substances and make water safe to drink. When water enters a treatment plant, it first goes through screening to remove large debris like leaves and sticks. The water then passes through coagulation and flocculation tanks, where chemicals are added to make particles clump together so they can be removed more easily.

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The next stage is sedimentation, where the clumped particles settle to the bottom of large tanks so they can be removed. Sand and gravel filters then trap smaller particles. Some utilities use activated carbon filters to remove chemicals like pesticides and chlorine taste and odor compounds. Finally, disinfection occurs—usually with chlorine, chloramines, or ozone—to kill bacteria, viruses, and other microorganisms that could cause illness.

The EPA sets drinking water standards through the Safe Drinking Water Act (SDWA), which was passed in 1974. These standards limit the amounts of certain contaminants that can be present in public water supplies. Regulated contaminants include bacteria, viruses, lead, arsenic, nitrates, pesticides, and many chemical compounds. Individual states can set standards that are stricter than federal standards, and many do.

Water utilities must test their water regularly to ensure it meets standards. American Water Works and other major utilities conduct thousands of water quality tests each month. If a utility finds that water does not meet standards, they must notify the public and take corrective action. Regular testing data is made available to customers through annual "Consumer Confidence Reports" that detail what was found in the water and whether it meets safety standards.

Lead and lead pipes are a particular concern because lead exposure can harm children's development and cause other health problems. The EPA requires utilities to monitor lead levels at customer taps. If lead exceeds 15 parts per billion at more than 10 percent of tested homes, the utility must take action such as treating water to make it less corrosive or replacing lead service lines.

Practical Takeaway: You can request your water utility's Consumer Confidence Report to learn what contaminants were tested for in your water and whether any were found at levels of concern. This document is available for free and provides detailed information about your local water quality.

Understanding Water Rates and How Billing Works

Water rates vary significantly across the United States depending on the source of water, treatment costs, local infrastructure conditions, and regional regulations. The average American uses about 82 gallons of water per person per day at home, though this varies by region and household size. Most households pay between $30 and $50 per month for water and sewer services combined, but rates in some areas are significantly higher or lower.

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Water utilities typically use one of several billing structures. The most common is a tiered rate system, where customers pay one price for a baseline amount of water (perhaps the first 10,000 gallons) and a higher price for additional water used above that level. This encourages conservation because using more water costs proportionally more. Some utilities charge a flat rate regardless of usage, while others use seasonal rates that are higher during summer months when demand peaks.

Bills typically include charges for water service, sewer service, and sometimes stormwater management. The water service charge covers treatment, delivery, and system maintenance. The sewer service charge covers wastewater collection and treatment. Stormwater charges fund the management of rain runoff, which prevents flooding and protects water quality.

Most utilities also charge a base or fixed charge that customers pay monthly regardless of how much water they use. This charge helps cover costs of maintaining the system, meter reading, and billing administration. Base charges typically range from $10 to $25 per month. Usage-based charges are calculated by multiplying the amount of water used (measured in hundreds of cubic feet or thousands of gallons) by the rate per unit.

Utilities regularly adjust rates to cover inflation, necessary system improvements, and regulatory compliance costs. Rate increases must generally be approved by state regulatory commissions, which review whether the increase is justified. Customers typically have opportunities to comment on proposed rate increases at public hearings.

Practical Takeaway: Review your water bill to understand what you are paying for—it typically breaks down water charges, sewer charges, and other fees separately. Contact your utility if you have questions about any charges or if your bill seems unusually high, as high usage can indicate a leak.

The Infrastructure Behind Water Systems

Water infrastructure is the physical system that delivers water to homes and manages wastewater. The United States has millions of miles of water pipes, many of which were installed 50 to 100 years ago. According to the American Water Works Association, the average water main in America is between 45 and 53 years old. Pipes have finite lifespans—many materials last 75 to 100 years—so much of the nation's water infrastructure is at or approaching the end of its useful life.

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The infrastructure system includes source water (lakes, rivers, wells), treatment plants, storage tanks, distribution pipes, and customer meters. Large transmission mains carry water from treatment plants across long distances. Smaller distribution pipes deliver water to individual neighborhoods and homes. Each water main has multiple connections, called service lines, that branch off to serve individual properties.

Lead service lines are a significant concern. Approximately 6 to 10 million lead service lines exist in the United States. While lead does not leach from lead pipes into water as it travels through mains, water sitting in lead service lines can dissolve small amounts of lead. The EPA and health organizations recommend replacing lead service lines, but this process is slow and expensive.

Water loss through leaks is another infrastructure challenge. Aging pipes develop cracks and breaks that allow water to escape before it reaches homes. The American Water Works Association estimates that water loss from leaking pipes ranges from 15 to 30 percent of treated water in some systems. Utilities invest heavily in pipe replacement and repair to reduce these losses, but many systems have limited budgets.

Wastewater infrastructure is equally important. Sewer pipes collect wastewater and carry it to treatment plants, where it is processed before being discharged into rivers, lakes, or oceans. Stormwater systems manage rain runoff, either through separate pipes or combined systems that handle both wastewater and stormwater. Combined sewer systems exist in many older cities; during heavy rainfall, these systems can overflow into waterways, causing environmental and public health concerns.

Practical Takeaway: Infrastructure investment is necessary to maintain reliable water service and protect public health. Utilities periodically conduct infrastructure projects that may involve road work, pipe replacement, or construction in your area. These projects, though sometimes inconvenient, are essential for system reliability and water safety.