ILlinois American Water's Rate Case Approved by Illinois Commerce Commission

Significant Infrastructure Investment Drives Increase
BELLEVILLE, Ill.--(Business Wire)--
Following an eleven-month review, the Illinois Commerce Commission
(ICC) today approved new rates for Illinois American Water that will
result in approximately $24.9 million in additional annual revenue for
the company. The rate case was filed with the ICC on August 31, 2007.
The company's last general rate increase was effective in August 2003.

The new rates reflect approximately $257 million of infrastructure
investments since December 2003 to enhance the company's water and
wastewater systems. The company also has experienced substantial
increases in operating costs.

"Delivering high quality, reliable customer service requires
continued investment in our water and wastewater systems," said Karla
Olson Teasley, President of Illinois American Water. "This rate
increase reflects our continued commitment to enhancing the
infrastructure in all communities we serve in Illinois."

The percentage amount of the rate increase and customer impact
varies by the company's operating districts in Peoria, Pekin, Lincoln,
Champaign, Streator, Pontiac, Sterling, Alton, Cairo and Interurban
(Belleville, East St. Louis, Granite City). Customers will receive
additional information in their September water bill explaining the
rate increase.

About Illinois American Water

Illinois American Water is the largest investor-owned water
utility in the state, providing high-quality and reliable water and/or
wastewater services to more than 1.2 million people. In addition to
its regulated operations, Illinois American Water provides water and
wastewater contract operations to the Village of Gilberts, serving an
additional 4,000 people. American Water also operates a customer
service center in Alton and a quality control and research laboratory
in Belleville.

Illinois American Water is a wholly-owned subsidiary of American
Water (NYSE:AWK). Founded in 1886, American Water is the largest
investor-owned U.S. water and wastewater utility company. With
headquarters in Voorhees, N.J., the company employs nearly 7,000
dedicated professionals who provide drinking water, wastewater and
other related services to approximately 15.6 million people in 32
states and Ontario, Canada. More information can be found by visiting
www.amwater.com.

Illinois American Water
Terry Mackin
Director, Communications & External Affairs
618-239-3218
Terry.Mackin@amwater.com

Copyright Business Wire 2008