American States Water Company (AWR): Marketing Mix Analysis [11-2024 Updated]

As we delve into the marketing mix of American States Water Company (AWR) for 2024, it becomes clear that this company is not just about providing essential utilities; it’s about strategic positioning in a competitive landscape. With a focus on regulated water and electric utility services, a robust operational presence primarily in California, and a commitment to sustainability, AWR's approach to the four P's—Product, Place, Promotion, and Price—offers valuable insights into its ongoing success and community impact. Read on to discover how AWR navigates challenges and capitalizes on opportunities in the utilities sector.

American States Water Company (AWR) - Marketing Mix: Product

Offers regulated water and electric utility services.

American States Water Company (AWR) provides regulated water and electric utility services primarily through its subsidiaries, Golden State Water Company (GSWC) and Bear Valley Electric Service (BVES). As of the third quarter of 2024, AWR reported total operating revenues of $161.8 million, with water operations contributing $124.0 million, electric services $9.0 million, and contracted services $28.7 million.

Provides contracted services for military bases.

AWR's contracted services segment involves managing and maintaining water and wastewater systems at various military bases. For the nine months ended September 30, 2024, revenues from contracted services reached $97.7 million, reflecting an increase of $3.7 million compared to the same period in 2023.

Water supply sourced primarily from wells and purchased water.

The water supply for AWR is sourced from a combination of groundwater wells and purchased water. During the third quarter of 2024, approximately 43% of the water supplied was purchased, while 57% was drawn from wells. This ratio indicates a slight decrease in purchased water from 44% in the third quarter of 2023.

Tariff-based revenues from water and electric services.

AWR generates tariff-based revenues from its water and electric utility services. For the third quarter of 2024, water segment revenues were $124.0 million, an increase of $7.8 million from the prior year, attributed to approved rate increases and higher consumption due to increased temperatures. Electric revenues for the same period were $9.0 million, reflecting a modest increase of $0.1 million.

Revenue from construction and management fees in contracted services.

The contracted services segment generates revenue through construction and management fees. In the third quarter of 2024, revenues from contracted services increased to $28.7 million, up from $26.5 million in the previous year, driven by higher management fees due to economic price adjustments.

For the nine months ended September 30, 2024, AWR's total operating revenues were $452.4 million, with water services contributing $324.7 million, electric services $29.9 million, and contracted services $97.7 million.

American States Water Company (AWR) - Marketing Mix: Place

Operates Mainly in California, with Services in Several Other States

American States Water Company (AWR) primarily operates in California, providing water and electric services. Additionally, its subsidiaries extend services to several other states including Florida, Kansas, Maryland, Massachusetts, New Mexico, North Carolina, South Carolina, Texas, and Virginia.

Water and Electric Services Targeted at Residential and Commercial Customers

AWR delivers water and electric services aimed at both residential and commercial customers. As of September 30, 2024, the operating revenues from water services reached $324.7 million, while electric services generated $29.9 million.

Contracted Services Provided at U.S. Military Bases

AWR also provides contracted services, which include construction revenues and management fees for operating and maintaining water and wastewater systems at various military bases. For the three months ended September 30, 2024, revenues from these contracted services amounted to $28.7 million.

Distribution Networks Ensure Efficient Delivery of Water and Electricity

AWR has established distribution networks that facilitate the efficient delivery of water and electricity to its customers. The company’s net property, plant, and equipment, which support these distribution capabilities, totaled approximately $2.04 billion as of September 30, 2024.

Overall, AWR's distribution strategies are designed to maximize customer convenience and operational efficiency, ensuring reliable access to essential services.

American States Water Company (AWR) - Marketing Mix: Promotion

Engages in community outreach and education on water conservation.

American States Water Company (AWR) actively participates in community outreach programs to educate the public on water conservation techniques. In 2024, AWR allocated approximately $1.5 million towards water conservation education initiatives. These programs reached over 100,000 residents across various communities, emphasizing sustainable practices and responsible water usage.

Utilizes regulatory filings and public announcements to communicate rate changes.

AWR communicates rate changes and other important financial information through regulatory filings. In 2024, the California Public Utilities Commission (CPUC) approved a general rate case that resulted in a rate increase effective January 1, 2024, which was projected to generate an additional $17.3 million in annual revenue. The company filed its quarterly earnings reports, showcasing a consolidated diluted earnings per share of $2.42 for the nine months ended September 30, 2024, down from $2.82 in the same period in 2023.

Highlights sustainability initiatives and water quality standards.

AWR emphasizes its commitment to sustainability and water quality through various promotional activities. In 2024, the company reported a $2.5 million investment in sustainability initiatives aimed at improving water quality and reducing environmental impact. The company adheres to stringent water quality standards, with 99.9% of water samples meeting or exceeding state and federal quality requirements.

Collaborates with governmental agencies for service improvements.

AWR collaborates with governmental agencies to enhance service delivery and infrastructure improvements. In 2024, the company partnered with local government entities to secure $3.5 million in funding for critical infrastructure upgrades. This collaboration aims to improve service reliability and efficiency, benefitting over 200,000 customers in California.

American States Water Company (AWR) - Marketing Mix: Price

Water prices adjusted through CPUC-approved tariff structures

American States Water Company (AWR) adjusts its water prices based on California Public Utilities Commission (CPUC)-approved tariff structures. For the nine months ended September 30, 2024, the total water revenues amounted to $324.7 million, reflecting a decrease from $345.9 million for the same period in 2023, primarily due to retroactive rates related to the full 2022 year.

Recent increase in water rates effective January 2024

Effective January 1, 2024, AWR implemented a third-year rate increase that contributed an additional $7.8 million in water revenues for the third quarter of 2024, leading to total water revenues of $124.0 million for that quarter. The authorized rate of return on rate base increased from 9.36% to 10.06% due to the Water Cost of Capital Mechanism (WCCM).

Electric rates subject to regulatory adjustments pending new rate cases

AWR's electric rates are also subject to regulatory adjustments. For the three months ended September 30, 2024, electric revenues reached $9.0 million, a slight increase from $8.96 million in the same period of 2023, attributed to higher usage, while awaiting new rates from an ongoing electric general rate case.

Contracted services billed based on performance and negotiated fees

In the contracted services segment, AWR recorded revenues of $28.7 million for the three months ended September 30, 2024, up from $26.5 million in 2023. These revenues are based on performance-based contracts and negotiated fees with entities such as the U.S. government.

Overall, AWR's pricing strategies reflect regulatory frameworks, operational costs, and market conditions, ensuring that water and electric services remain competitively priced while meeting regulatory requirements.

In summary, American States Water Company (AWR) effectively leverages its marketing mix to deliver essential services while ensuring sustainability and community engagement. With a focus on regulatory compliance and contracted services for military operations, the company remains a key player in the utility sector. As it navigates recent price adjustments and enhances its distribution networks, AWR's commitment to water conservation and quality standards continues to resonate with both residential and commercial customers, solidifying its role as a trusted utility provider in California and beyond.

Updated on 16 Nov 2024

Resources:

1. American States Water Company (AWR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of American States Water Company (AWR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View American States Water Company (AWR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.