American Water Applauds City Council's Vote to End Attempted Takeover of Kentucky American Water.

LEXINGTON, Ky. -- Kentucky American Water Employees Commended; Company Ready to Move Forward in Spirit of Partnership

The case for private ownership of water systems was strengthened on Tuesday following the Lexington-Fayette Urban County Council's 9-6 vote to override Mayor Teresa Isaac's veto of a resolution calling for an end to the condemnation action.

The local government's effort to condemn the private water utility was among the largest ever attempted in the United States.

After 39 months of defending its right to serve customers in Central Kentucky, officials for Kentucky American Water said they are grateful the government's takeover attempt is at an end.

"Our customers made it clear for more than two years that they supported continued service by Kentucky American Water, and a new majority on Council's vote is consistent with the wishes of the citizens of Lexington."

The Lexington-Fayette Urban County Government began debating a takeover of the water company in February of 2002, then voted 9-6 to condemn the company on July 1, 2003. In November 2004, the voters in Lexington elected a new Council which had a majority of members that opposed the condemnation. The new Council voted on January 20, 2005 to end the condemnation, but the resolution was vetoed by Lexington Mayor Teresa Isaac. Tuesday's veto override clears the way for the legal proceedings to be dismissed.

"We believe today what we believed three years ago, that continued ownership by Kentucky American Water ensures the best opportunity for our customers to have access to quality water service at a fair price," said Rowe, "This is a great day for the community and for our employees. Our employees' dedication and perseverance during this time has been extraordinary."

"This is a significant development for Central Kentucky but it also speaks volumes about the value and contributions of privately owned and operated water systems in the United States," Rowe said. "The council essentially recognized the will of the people and the value of a local company and did the right thing when they voted 9-6 to override the Mayor's veto and end the divisive and expensive debate.

"We are grateful to those members of the Urban County Council who recognized that working together in a spirit of partnership, not ownership, is the real opportunity for the future of water service."

The water company sent the documents supporting the agreement approved on Tuesday by the Urban County Council to Mayor Isaac, who is authorized to execute the agreements for the Lexington-Fayette Urban County Government.

"We promised our customers in 2002 that we would continue to provide trusted water service during the attempted takeover, and we have done that," said Rowe. "We also said the company would vigorously defend its right to do business in Lexington, and we have done that. We look forward to growing our business and being a responsible corporate citizen for decades to come."

Kentucky American Water provides reliable, quality service to more than 325,000 people throughout Central Kentucky. Kentucky American Water, with the support of American Water, has the technical capabilities of a nationwide network and the local knowledge to provide the highest quality water with personal service.

With a history of more than 100 years, American Water provides high quality water, wastewater and other related services to more than 18 million people in 29 states and three Canadian provinces. American Water is part of RWE Thames Water, the third largest water and wastewater services company in the world. Through our combined experience and financial strength, we provide global expertise in water quality, research and development, customer satisfaction and security. More information can be found by visiting our website, www.amwater.com.