Thanks Ed. Good morning everyone and thanks for joining us.
Before we move to quarter results, let me speak for a moment about our recent growth news.
As you know, a key part of our strategy is to operate in states where we can best serve customers, drive efficiencies and continue to grow our regulated business. Recall that earlier in the year, we announced the sale of our Michigan operation and as you know in late 2019, we announced the sale of our New York operation. This slide shows what our new regulated service territory will look like after the announced transactions are completed.
Moving to slide six. We recently announced what will be the largest municipal acquisition in Pennsylvania American Water's history. On April 6, we signed an agreement to acquire the wastewater treatment and collection system for the City of York, Pennsylvania. This agreement will add an equivalent customer connection total of more than 45,000.
As part of the agreement, Pennsylvania American Water will also continue to provide contracted wholesale waste water treatment and disposal for seven surrounding communities of York. We look forward to developing strong relationships that meet the needs of all customers, including those outside the city. This is yet another example of our strategy to grow where we can add value. It was also executed under Act 12 of 2016, which allows municipalities to sell their water and wastewater systems for a price based on the fair market value of the facilities.
New York Mayor Michael Helfrich said, "This is a new day for York, one filled with an unwavering optimism as our residents and businesses can finally breathe a sigh of relief for the first time in decades." Turning to slide seven.
New Jersey American Water announced an agreement during the first quarter to acquire the water and wastewater assets of Egg Harbor City, New Jersey. This municipally owned water and wastewater system serves approximately 3,000 customer connections. The agreement is notable as it's the first sale being executed through New Jersey's Water Infrastructure Protection Act or WIPA. That law facilitates the sale or lease of municipally owned water or wastewater systems that meet certain criteria such as significant noncompliance. Egg Harbor City mayor Lisa Jim Petty said this sale will mean better infrastructure, stable water rates and millions in funds for the city.
Additionally, Virginia American Water signed an agreement to acquire the drinking water assets of the town of Waverley. This municipally owned water system serves approximately 900 customer connections and it's our first agreement signed on the new fair market value legislation in the Virginia Commonwealth. To date this year, we have added approximately 4,500 customer connections through closed acquisitions and organic growth.
We have under agreement more than 86,000 customer connections, including the City of York. In total, the acquisitions closed so far this year and all those under agreement represent approximately $440 million in additional rate base and an estimated $115 million of follow-on additional capital expenditures over the next five years. And our growth pipeline remains strong with more than 1.2 million customer connection opportunities.
Lastly, I would like to provide an update on the sale of New York American Water. In late March 2021, the New York State Department of Public Service Special Council released the findings of their municipalization study.
As expected, the study focused primarily on the need for tax relief for customers including recommendations to eliminate the Special Franchise Tax. The study also focused on the feasibility of municipalization. These findings were not addressed in the Governor's recently released budget.
Our New York subsidiary continues to work constructively with the New York State Department of Public Service, including through ongoing settlement discussions with all parties and we remain confident that the sale will be completed.
We are working diligently to close the transaction.
Assuming progress continues as expected, we believe that the net impact to New York results on 2021 results won't impact our 2021 guidance range. Further, we don't anticipate any impact on the expected timing of our previously discussed future equity needs.
Let's move to slide eight and cover first quarter results.
Our first quarter 2021 earnings per share of $0.73 were up 7.4% compared to the first quarter of 2020. We invested capital of $342 million in the first quarter as we continue to balance that investment by focusing on operating and capital efficiencies, constructive regulatory outcomes and by leveraging the size and scale of our business.
As a reminder, we have challenged ourselves with a new O&M efficiency target of 30.4% by 2025. With this strong start to 2021 and continued execution of our strategies, we are affirming today our 2021 earnings guidance range of $4.18 to $4.28 per share.
We are also affirming our long term EPS compound annual growth rate in the 7% to 10% range.
Turning to slide nine.
Let's go through some the regulatory and legislative highlights in the first quarter of 2021. In February, the Pennsylvania Public Utility Commission unanimously approved a previously filed settlement agreement between Pennsylvania American Water and the PUC Bureau of Investigation and Enforcement. The request was driven by $1.64 billion in investment in 2019 through 2022. Pennsylvania American Water was authorized additional annualized revenues of $90 million over a two-year, excluding and agreed to reduction in revenues for tax savings passed back to customers as a result of the Tax Cuts and Jobs Act of 2017. On April 7, the Missouri Public Service Commission approved an agreement reached by the party, the Missouri American Water's request for a rate adjustment. The rate order includes approximately $620 million in water and wastewater system improvements made since the end of 2017. Rates will be effective on May 28, 2021 and will result in additional annualized water and wastewater revenue of $22 million, excluding the reduction in revenue for tax savings passed back to customers, also a result of TCJA.
We also of the pending rate case in Iowa, which is moving on schedule and we filed a rate case in West Virginia on April 30.
Additionally, as we reported previously, California American Water filed for new rates in July 2019. The case covers 2021 through 2023. In January 2021, California American Water submitted to the Commission a comprehensive settlement with the Public Advocate's office and several interveners. If the global settlement is adopted by the Commission without changes, revenues will increase by $33.5 million over three years with agreed capital investment of $165 million in 2021 and 2022. And just yesterday, California American Water filed it's cost of capital application with the Commission.
As part of the application, California American Water requested an authorized cost of equity of 10.75%, cost of debt at 4.35% and overall rate of return of 8%, which is sufficient to provide California American Water with the opportunity to earn a reasonable return on its investment. The case covers 2022 through 2024 with the revised cost of capital to be effective January 1, 2022.
Regarding the Monterey Peninsula Water Supply Project.
As a reminder, California American Water refiled its application to the Coastal Commission on November 6, 2020. On December 3, 2020, the Coastal Commission sent a notice requesting additional information needed to consider the application complete. In March 2021, California American Water provided the request responses and once staff deems the application complete by statute, the Coastal Commission would have 180 days to process.
Moving to state legislation on slide 10.
We continue to see states take action to help address water and wastewater challenges. In Kentucky, the Governor signed into law a new acquisition adjustment legislation. This law allows systems to be acquired above net book value when certain criteria are met. The law also establishes a timeline for a PFC decision on an acquisition, which is within 60 to 150 days of application approval. In Indiana, there are two pieces of legislation that have been signed into law that will benefit our current and future customers. Act 1287 creates a mechanism that reduces the required upfront cost to new customers for water and wastewater utility to extend service to underserved areas. And Act 349 establishes a tax rider for water and wastewater utilities based upon any change in state or federal income tax law.
On the national level, we are pleased to see that water and wastewater infrastructure is included in both the administration's Build Back Better Plan as well as introduced in federal legislation. There continues to be a significant need to invest in water and wastewater infrastructure, not just within our system, but broadly across the United States. We think the proposed funding to state revolving funds for drinking water and the possible expansion of the water [indiscernible] program to directly benefit our customers. The administration's plan also includes the tax package and Susan will talk about in a moment.
Moving to slide 11. Customers remain at the center of every decision we make. This means smart investments balanced by efficient operations and capital deployment.
For the 12-month period ending March 31, 2021, our O&M efficiency ratio was 34.1%, a decrease from 34.5% for the 12-month period ended March 31, 2020.
As we know each quarter, our adjusted O&M expenses are slightly higher today than they were in 2010. Since then, we have added approximately 327,000 customer connections while expenses only increased at a compound annual growth rate of 1.1%.
Before I turn the call over to Susan, let me cover a few additional items.
You may have seen in our 10-Q a discussion around a matter related to HOS. Likely you saw a note from a rating agency commenting in that disclosure.
As noted in the 10-Q, I want to remind you that this is a matter that relates to a subpoena received by AWR, an American Water subsidiary that operates a portion of HOS. The subpoena seeks information related only to HOS' Metropolitan New York City operations.
As we noted in the 10-Q, AWR is cooperating fully with the investigation. And while it's impossible to predict the outcome at this point, we do not believe that it will result in any material impact to our overall operations or financial results.
As a final note on the business, I would like to congratulate Mark McDonough, who was recently named President and New Jersey American Water and Steve Curtis who will replace Mark as President of our Military Services Group. These are great examples of how we build and leverage the deep bench strength of American Water. Both Mark and Steve have had increasing roles and responsibilities throughout their careers at American Water and our models of our values. And I will end with a thank you to our employees for their continued response to COVID-19.
We continue to execute our preparedness plans as we look to reintegrate those employees who have been working remotely.
As always, safety is our top priority. This past March, we were very pleased that it was our first month in our history with no OSHA recordable incidents occurred throughout our entire company.
Our commitment to zero injuries and incidents will continue because no injury is ever acceptable to us. And with that, I will turn the call over Susan.