American Water Works

Pricing is set through public utility commissions rather than market forces.

Within that framework American Water has solid ‘constructive’ pricing power: mechanisms to recover inflationary costs, multi‑year rate case cadence, and infrastructure surcharges that accelerate recovery of replacement spending. 2024 and 2025 orders in NJ, PA, MO, IL, VA and others embedded allowed ROEs around mid‑9 percents and billions of new rate base.

Latent pricing power stems from the necessity of service and decades of mandated replacement. Offsetting factors are political sensitivity to affordability, timing lags between spend and recovery, and jurisdictional variance. On balance, regulated pricing power is durable but bounded by oversight.