David Bowler
Executive Vice President and Chief Financial Officer at American Water Works
Thanks John, and good morning everyone. Before I start, I'd like to also congratulate Susan on her upcoming retirement and John on his succession into the CEO role. Susan, I echo John's comments on it being a pleasure to work with you over the years. It will certainly be missed by all of us here. Now turning to Slide 10, let me provide a few more details on 2024 results as compared to 2023.
You also find details of fourth quarter results in the appendix. Consolidated reported earnings were $5.39 per share in 2024, higher by $0.49 per share compared to 2023. As John noted, earnings in 2024 benefited from an estimated $0.12 per share as a result of revenue from drier than normal weather experienced across our states as compared to $0.13 per share of favorable weather in 2023.
Excluding the impacts of weather, revenues were higher by $1.28 per share, primarily due to authorized rate increases from general rate cases and infrastructure surcharges to recover investment across our states. Revenues were also higher from closed water and wastewater acquisitions, organic customer growth and an increase from changes in customer demand.
One additional item to note is that purchase water costs, which were higher by $0.08 per share year over year have been netted against revenues as these costs are generally recovered on a dollar for dollar basis. In looking at operating costs, O and m was higher by 22 cents per share, driven primarily by employee related costs and other increases that support growth in the business.
As we expected, production costs related to fuel, power and chemicals were also slightly higher compared to 2023. Next, general taxes, which are comprised of property and gross receipts taxes were higher by 5 cents per share with the increase in property taxes tied to the level of capital investment and higher gross receipts tax driven by higher revenue primarily in New Jersey.
Depreciation increased $0.31 per share and long term financing costs increased $0.33 per share, both as expected in support of our investment growth. And finally, we had $0.09 per share of additional interest income from the February 2024amendment of the Note related to the sale of homeowner services. We will continue to break this out quarterly so investors can track the ongoing growth of American water from our core regulated strategy without this additional interest income.
Turning to Slide 11, we summarize the seven rate cases we successfully completed in 2024, five of which we covered on prior calls. In the fourth quarter, we received orders in Illinois and California as well as an updated final order in Kentucky. In December, the Illinois Commission approved an additional $105 million in annualized revenues effective January 1, 2025.
This order includes an allowed return on equity of 9.84% and an equity layer of 49%, both of which were consistent with our last rate case in Illinois. We continue to believe that Illinois is a constructive environment for American water and is supportive of the investment needed to continue to provide safe and reliable service for the benefit of our Illinois American water customers.
Switching over to California Also in December, the Commission there approved and adopted a partial settlement agreement providing incremental annualized revenues of $53 million over three years, beginning with rates retroactive to January 2024. The Commission's decision included a partial decoupling mechanism and approval of an important sales adjustment mechanism that allows annual updates of forecasts of water sales for rate making purposes.
While the decision didn't recognize the importance of a full decoupling mechanism in promoting affordable rates and conservation, we filed an application in December for rehearing with the Commission and are exploring other avenues to ensure that customers can achieve the benefits associated with decoupling. Also in California, the Commission granted the request for an additional one year extension of the cost of capital filing to May 1st of 2026, which will set the authorized cost of capital beginning January 1st of 2027.
Our authorized ROE in California will remain at 10.2% through December 31st, 2026. And finally, in Kentucky, the Public Service Commission approved a final order providing for $17 million of annualized increases in water revenues, which is higher by about 6 million from the initial order in May of 2024. As a reminder after received in May, we filed a motion for clarification on the authorized amount of annualized revenues in this case.
New rates provided in the final order were effective November 6th. Turning to slide 12, you can see we have general rate cases in progress in four jurisdictions. The most prominent rate case for us this year is in Missouri, where we are seeking recovery of $1.1 billion of capital investments. Hearings begin at the end of this month and settlement discussions are underway ahead of REIS due at the end of March. We expect new rates to go into effect in the middle of 2025.
Overall, the key parties in this case have filed similar positions as they did in our prior case two years ago, which was settled. As a reminder in this case, the Commission allows all parties to propose specific adjustments beyond December 31, 2024, and we have proposed to capture investments through May 2025. Separately, we are continuing to work alongside an informal coalition of water and gas utilities in Missouri on a legislative path for a future test year and have supported the introduction of four separate bills in the current session related to that effort.
The Missouri legislative session ends on May 16th. Finally, in Virginia, the filed stipulation of settlement remains subject to Commission review and approval, which we are awaiting One quick note at the bottom of the slide we now provide a list of the dates we filed our most recent general rate cases by state. As we've said in the past, we expect to file rate cases about every two years as supported by our ongoing investments to continue to provide safe, clean and reliable water and wastewater services for the long term benefit of our customers.
Turning to Slide 13, let's review the strength of our balance sheet credit metrics and liquidity position. As we began 2025, our total debt to cap ratio at the end of the year net of $96 million of cash on hand was 57%, which was well within our target of less than 60%. Investors can expect our company to continue to be focused on this target over the long term.
We remain a rated AT S and P with a stable outlook and just last month Moody's affirmed our solid Baa1 investment grade credit rating and stable outlook. Both agencies note our scale, strong regulatory and operational diversity across 14 states, low risk business and our steady financial performance in their analysis. They also note our trend of credit supported regulatory outcomes and expected sustained FFO to debt ratios well within the current ratings thresholds.
We're confident our business and financial profile, including FFO to debt will continue to support either our current or higher investment grade credit ratings. From this position of balance sheet strength, let's turn to Slide 14 for a review of our guidance and five year financing plan. As John mentioned, we affirmed our 2025 EPS guidance which again represents 8% annual growth.
The backbone of the plan continues to be earning our allowed returns on capital we invest to serve our customers we while prudently managing operating costs so that we can deliver on our customer affordability target. It's really that simple. As a reminder, our 2025 guidance range includes $0.10 per share of incremental interest income from the amendment of the HOS note a year ago, which is on top of the interest income from the original note terms that we are replacing with earnings from the regulated business.
As we've said in the past repayment of the Note is a component of our long term financing plan as a source of funding for our growth. We are also affirming our financing plan shared last fall, now covering 2025-2029. As we said previously, the plan includes an estimated total 2.5 billion of external equity issuances with no equity plan for 2025.
The level and timing of external equity is tied very simply to our need to fund growth and maintain our strong financial position. Based on our current projections of capital spending and cash flows, we currently expect to issue $1 billion of equity at some point in 2026 and $1.5 billion in 2029. The timing of future equity is subject to market conditions as well as the underlying assumptions around our projected CapEx and cash flows.
Since we are already in alignment with our targets for debt to cap and dividend payout ratios, we have the flexibility to adjust these plans and respond to market conditions if and when they change for the benefit of our customers and investors alike. Overall, investors should expect equity financing to occur routinely as determined by our investment program rate case cycle and as appropriate to maintain our strong balance sheet and credit metrics.
Finally, I'll wrap up by noting that our financing plan for calendar year 2025 includes 1.5 to $2 billion $2 billion of long term debt financing.
With that, I'll turn it over to Cheryl to talk more about our capital program, our recent acquisition activity, and a look at our key growth drivers. Cheryl.
