M. Susan Hardwick
President and Chief Executive Officer at American Water Works
Thanks, Aaron, and good morning, everyone. Let me also say how happy we are to have John Griffith with us as our Chief Financial Officer, and you'll hear more from John shortly. Let's turn to Slide five, and I'll start by covering some highlights of the first half of the year. In the first six months of 2022, earnings were $2.07 per share compared to $1.87 per share in the same period of 2021. Results for the regulated business drove the majority of the growth, accounting for $0.16 of the $0.20 increase while MSG and other results were up $0.04 as compared to the same period in 2021.
The regulated growth was in line with our expectations as we knew the first half of the year would be strong due to revenue increases from several general rate case proceedings completed in 2021 and early 2022 and from infrastructure mechanism filings. These higher revenues were partially offset by higher operating costs, which I'll talk more about shortly. Our regulated business invested over $800 million in capital projects and acquisitions for the quarter and $1.25 billion year-to-date, reflecting great work by our teams responsible for executing these investments.
As you will recall, the total capital investment plan for 2022 included the $235 million acquisition of the City of York's wastewater system that we were excited to close in May. Coupled with our strong first quarter results, our capital investments are off to a good start for the year and on pace to meet our $2.5 billion goal for the year. We continue to stay focused on the plan. And as you saw yesterday, we have now for the third time affirmed our 2022 earnings guidance.
And John will cover 2022 results and guidance in more detail a little later in the call. Before I move on, let me comment again about how excited we are to welcome the customers and employees of York's wastewater system to the American Water family. As we've said, this is the largest acquisition in Pennsylvania American Water history, and it's a great example of how municipal acquisitions are executed.
The importance of understanding the community's objectives can't be underestimated, and we jointly created an opportunity that benefits all stakeholders. And as we think about the competitive landscape for water and wastewater acquisitions, we continue to focus on growing in states where we can leverage our competitive advantage. As we've said many times before, we target acquisitions in the range of 5,000 to 50,000 customers, where we have constructive regulatory environments and existing footprint and critical mass.
This critical mass is important in our efforts to promote customer affordability and cost efficiencies. Also, as we grow in each state, we will have a greater voice to help solve industry challenges through legislative and regulatory policies. So while we won't be awarded every opportunity we pursue, we know that there are plenty of communities in need, and we believe our 135-plus year history of delivering safe, clean, reliable and affordable water and wastewater services will enable us to continue to achieve a high success rate in our pursuits.
The final highlight I'll cover here is that the Military Services Group had another great win at the end of the second quarter. And I'll let Cheryl give you the details, but the award of our first Navy contract at Mayport adds to the 17 other military installations that we're very proud to serve. Turning to Slide six. I'll take a few minutes here to provide a review of the macroeconomic environment and how we are managing the impacts to the company. Our focus on operating efficiency is not new, as you know. In the chart at the bottom of Slide six, you can see the result of our disciplined focus on managing costs as we grow the business.
This focus has positioned us well to have managed through much of the pressure so far on supply and even cost increases brought about with the effects of the pandemic. Now as we are in what may be an extended period of inflationary pressure, we continue to exercise our disciplined approach to cost management by leveraging our scale. And through midyear, while we are experiencing cost increases in certain supplies and energy, the impacts to date have been fairly modest.
In terms of our most significant costs, labor is our biggest operating expense by far. We work regularly with our union leadership to secure contract renewals. And so far, we have been able to achieve very fair outcomes. For our nonunion workforce, we're focused on filling key roles and maintaining our practice of competitive compensation. Chemical costs and purchase power are usually the next biggest operating cost. While our supply chain strategies and purchasing power have helped mitigate chemical cost increases, especially as compared to our peers, we do expect higher O&M costs this year due to higher chemical prices.
For many years now, the supply chain team has been successful in partnering with operations to secure reliable, cost-effective power and fleet fuel contracts across our footprint. And because of these efforts, we expect only modest power and fuel cost increases in 2022. Overall, we estimate an impact of about $0.06 to $0.08 per share of these types of cost increases year-to-date, which we've been able to generally offset through other results. Later, John will talk more about the possible impacts on the year.
But as I said, we are confident in our ability to hit our earnings expectations for the year. And perhaps one final comment before I talk about how we're pursuing regulatory solutions for this rising production cost environment. Certainly, a lot has been written over the last few weeks about pension accounting and expense levels going forward. I'd simply mention that our pension plans were funded at just under 90% as of year-end 2021 with a roughly 50-50 target allocation for equity and fixed income. Though there has been much volatility in the equity markets through midyear, I'd remind you that the pension obligation remeasurement will be done at the end of 2022, and that will drive the determination of our 2023 expense.
The accounting method we use includes using the fair market value of planned assets at year-end to establish the expected return on plan assets. And we also used the quarter approach for amortizing gains and losses. These methods were selected many years ago and have resulted in moderate variability in pension expense, both favorable and unfavorable over the years, which we've always managed as part of our overall cost management approach.
This includes regulatory solutions such as the pension trackers we have in place in Missouri and California, and updates to pension expense in active general rate cases. As an example of how we are addressing these costs in current cases in the Illinois case currently on file, we requested and received approval last week to update the requested revenue requirement for increased costs including an estimated increase in pension costs.
That request will be considered in this case. And that goes to my final point on this slide around regulatory solutions. Our teams throughout the company know that regulatory execution is vital to meeting our earnings objectives and our financial plan generally. The regulatory solutions we are pursuing such as cost deferrals and expense recovery mechanisms in all of the current active cases are closely aligned with the interest of regulators and customers in managing affordability and limiting variability of customer bills.
This is no doubt a challenging environment, we all find ourselves in, but we remain confident in our ability to manage through it using our disciplined approach to cost management and our ability to execute effectively in the regulatory environment. And with that, let me turn it over to John to cover more detail on our operating results and financing plans. John?
