AMER0838_CR Report 2010_8_23 - American Water

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perspective on: governance new water realities and ethics Our business depends today and for on the trust. future. Meeting water challenges More than $1 TRILLION is needed for America’s water infrastructure We actively work with our consumers and our communities through educational events, free home water audits, tours and open houses to help raise awareness of water issues and promote smart and efficient water use. Preparing for Future Demands Clean water is one of our most precious natural resources—essential for human life, and critical to the well being of both our economy and our natural environment. Despite the fact that access to clean water is often taken for granted in the developed nations, it is poised to be one of our great global challenges for the 21 st century. According to the EPA, water scarcity, which is already a concern in some regions in the U.S., will increase in the future due to population growth, economic development, industrial and agricultural production, the intrusion of saltwater into our drinking water aquifers, and many other factors. Our ability to meet the existing and future water demands of our customers depends on an adequate supply of water—and we employ a variety of measures described throughout this report to ensure we can meet long-term needs. Our case studies provide examples of solutions we have put in place in areas of operations that are at risk of water scarcity. Due to future trends impacting water supply, the water industry must focus on long-term solutions involving all of our stakeholders in order to manage our water resources efficiently. We foresee the following interrelated challenges for the water industry: changing patterns of supply and demand in some areas, infrastructure needs and climate variability. The following sections briefly discuss these three challenges. To learn more about how American Water is actively addressing these and other challenges, see the “Our Priority—Your Water” section. Corporate responsibility report 2010 17
perspective on: governance new water realities and ethics CHANGING PATTERNS OF SUPPLY AND DEMAND IN SOME U.S. REGIONS The U.S. is the only industrialized nation whose population is growing significantly. Whereas the population of Europe is expected to decrease by 10 percent by 2050, that of the U.S. is expected to increase by nearly 50 percent from 2000 levels. The population is growing fastest in areas where water is scarcest. This growing population will place new demands on increasingly scarce water resources— resources that are already impacted by other issues such as pollution and inefficient usage. According to the EPA, as many as 36 states may experience water shortages in the next five years, even in the absence of drought. For example, the West and Southwest have experienced rapid population growth and depend heavily on limited groundwater and surface water supplies. States surrounding the Great Lakes are already heavily populated and will continue to grow. The Southeast is experiencing rapidly increasing population—especially in coastal areas. It is clear that in order to meet demand for scarce resources, the water industry must find new sources of supply to increase capacity while remaining environmentally sensitive. Ironically, while increasing population may result in increased demand in certain areas, systemwide, American Water has experienced decreasing per capita consumption over an extended period of time. A number of factors contribute to this phenomenon, such as stricter building codes, more efficient appliances and fixtures, more constrained water supplies and the needs of environmental and habitat protection, an increasing conservation ethic, decreasing average household size, and others. The result is that in some areas the financial stability of the utility can be jeopardized as consumption and revenues decrease but fixed costs and the need to comply with increasing water quality standards and provide for infrastructure replacement remain. At American Water, we have a critical role to play in balancing the challenge of increased demand and decreasing per capita consumption by encouraging smart and efficient water use while at the same time pursuing regulatory policies that preserve the financial integrity of the utility to ensure fixed-cost recovery. We actively work with our consumers and our communities through educational events, free home water audits, tours and open houses to help raise awareness of water issues and promote smart and efficient water use. Through our partnership with the EPA’s WaterSense program we participate in programs focused on wise water use. Our research and innovation are focused on solutions such as water reuse, desalination and leak detection to help ensure a sustainable supply of water for a growing population. Additionally, we work with public utility commissions to establish appropriate signals about the true value of the service and promote the efficient allocation of scarce resources. Learn about our approaches in the Engaging with Customers and Communities and Case Study sections. Another Perspective “As we move deeper into the 21st century, water companies and policy experts face a series of daunting challenges, including increasing demand for clean water, aging infrastructure and urban water pollution, and climate disruption. Yet two potent solutions have emerged that can address these challenges: water efficiency and green infrastructure. These two tools have the power to transform our relationship to water in an era of growing scarcity and to ensure a consistent supply of clean, safe water for our nation. “Efficiency doesn’t mean going without; it means doing more with less. A host of new measures and technologies are making it possible for communities to get more productivity using less water. By making our homes, offices and farms more efficient, we can also save energy, since the energy costs embedded in water are often significant. “Green infrastructure—things like urban forestry, street-edge gardens, and pervious pavement—is a proven and cost-effective way to prevent polluted runoff. But it also generates many additional benefits. It helps with water supply challenges by providing a place to infiltrate (or store) rainwater that would otherwise runoff and deliver pollution to rivers and the ocean. It adds more green space to communities, raises property values, and it improves community aesthetics and livability. It is also cost-effective. The EPA found that in most cases, upfront costs were lower for green projects than for conventional ones, and the savings in the green cases ranged from 15 to 80 percent. “Efficiency and green infrastructure are two pillars of good water policy today. They help companies like American Water deliver clean, steady supplies of water to their customers while streamlining costs at the same time. But they also do it in a way that enhances social responsibility and commitment. Both measures save customers money, prevent pollution that endangers our families, and buffer communities from the impacts of climate change. “That’s what makes green infrastructure and water efficiency 21 st century solutions: they are good for investors, good for consumers, and good for the environment.” David S. Beckman Director, Water Program & Senior Attorney, Natural Resources Defense Council Corporate responsibility report 2010 18
Page 1 and 2: Corporate Responsibility Report 201
Page 3 and 4: Table of Contents 3-20 OUR COMPANY
Page 5 and 6: who we are American Water Operation
Page 7 and 8: Who we are We care about water. It
Page 9 and 10: who we are AMERICAN WATER TIMELINE
Page 11 and 12: perspective on: governance and ethi
Page 13 and 14: perspective on: governance and ethi
Page 15 and 16: perspective on: governance integrat
Page 17: perspective on: governance integrat
Page 21 and 22: perspective on: new water realities
Page 23 and 24: perspective on: governance integrat
Page 25 and 26: perspective on: INTEGRATED water re
Page 27 and 28: perspective on: energy and water Am
Page 29 and 30: perspective on: governance customer
Page 31 and 32: perspective on: ACCESS AND AFFORDAB
Page 37 and 38: perspective on: Managing Risks Our
Page 39 and 40: perspective on: Innovation Our busi
Page 41 and 42: perspective on: Public Policy Our b
Page 43 and 44: Our Performance In this section we
Page 45 and 46: perspective on: ethical performance
Page 47 and 48: perspective on: water management pe
Page 53 and 54: perspective on: Environmental Perfo
Page 55 and 56: perspective on: Environmental Perfo
Page 57 and 58: perspective on: Workplace Performan
Page 59 and 60: perspective on: Workplace Performan
Page 61 and 62: perspective on: our customers Our M
Page 63 and 64: perspective on: Supply Chain Perfor
Page 65 and 66: CASE STUDIES Our business depends o
Page 67 and 68: CASE STUDIES providers and local go
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metrics ethical performance metrics
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metrics TOTAL NUMBER AND RATE OF EM
Page 73 and 74:
metrics AMERICAN WATER MONTHLY RESI
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AMER0838_CR Report 2010_8_23 - American Water

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