Washington, D.C. 20549

                                 SCHEDULE 14A

                Proxy Statement Pursuant to Section 14(a) of the
                        Securities Exchange Act of 1934

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[Logo]                   RWE Acquisition Update #3

October 8, 2001

This is an update on the RWE/Thames acquisition for Associates of American
Water. Frequent updates will be distributed in the coming weeks via email.
They will then be archived, along with other materials, in the "RWE
Acquisition Update" database on Lotus Notes.

          Last week, RWE President and Chief Executive Officer Dr. Dietmar
Kuhnt, and Chief Financial Officer Klaus Sturany visited the Voorhees
headquarters. During their short stay they met with members of the senior
management team to talk about RWE's business, their perspectives on the
proposed acquisition and on recent events in the US. Here is an excerpt of Dr.
Kuhnt's remarks:

On the transaction

          I can't tell you how excited I am for RWE and Thames Water to begin a
partnership with American Water Works... We are confident this partnership
will create new growth opportunities for everyone who is connected to American
Water Works. As part of RWE, our combined company will have greater access to
capital. This, in turn, will create new possibilities to enhance growth
throughout the United States and in the rest of North and South America, the
region for which you -- the American Water Works team -- will be responsible
once the transaction closes.

          Beyond ensuring that the newly combined company has access to growth
capital, its success will be determined by the degree to which American Water
Works, Thames Water and RWE exchange operating and management best practices.
For such a healthy exchange of ideas and know-how within our family of
companies will be one of the most important ways we will set ourselves apart
from the competition on a global and local scale.

          Although the close of the transaction is still far off, I'd like to
extend to you an early welcome to the RWE family of companies. We are fully
aware of the heritage we will be inheriting from American Water Works, and are
committed to maintaining the company's legacy as we continue to enable its
growth, and together build the world leader in water.

                                Continued . . .

RWE Acquisition Update #3 - page 2

RWE's Presence in the US

          RWE...has a history of operating in the United States. In addition
to Thames Water's E-Town's business, the RWE Group has a number of other
subsidiaries and affiliations here. These include companies such as
Pittsburgh-based CONSOL Energy, a company that holds a leading position in the
global coal market...CONSOL is a multi-fuel provider and also operates mines
in Pennsylvania, Ohio, Virginia, West Virginia, Kentucky, Illinois and Utah,
and currently produces approximately 7% of the total annual output of the U.S.
hard coal market.

          Other RWE businesses with major operations in the U.S. are the
construction companies Turner Corporation of Dallas and Kitchell Corporation
of Phoenix, and Heidelberger, which is the market leader in the United States
for web-fed offset presses. Heidelberger has substantial operations in the
U.S., principally in New Hampshire.

          During the fiscal year just ended...approximately 20% of the RWE
Group's $57 billion in sales were generated in North America. North America
accounts for about half of the sales we generate outside of Germany.

On the events of September 11

          On behalf of the more than 170,000 employees of the RWE family
worldwide, let me take a moment to again express our profound sadness and
outrage regarding the terrorist attack on the United States that took place
three weeks ago. Our prayers are with the victims of these shameful attacks,
their families and the countless rescue workers and volunteers who have worked
at great peril in the hopes of saving even one life and helping to restore and
rebuild New York and Washington.

          It has been said by others, but it bears repeating here: All of us
around the world have been Americans throughout these past few weeks. And that
rings true especially for RWE. For RWE and its affiliates employ more than
16,500 people in the United States, or about 10% of the Group's entire work
force. In light of our company's presence in the U.S., and our general
commitment to being a true part of the communities in which we operate, we
have donated $2 million dollars to support the recovery efforts in New York
and Washington. We are currently in contact with the honorable Daniel Coats,
the US Ambassador to Germany on where the donation would best be served.

                                     * * *

          American Water Works Company, Inc. (the "Company"), RWE
Aktiengesellschaft, a company organized under the laws of the Federal Republic
of Germany ("Guarantor"), Thames Water Aqua Holdings GmbH, a company organized
under the laws of the Federal Republic of Germany and a wholly owned
subsidiary of Guarantor ("Parent"), and Apollo Acquisition Company, a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub") have entered into
an Agreement and Plan of Merger, dated as of September 16, 2001, pursuant to
which Sub will be merged with and into the Company with the Company surviving
the merger (the "Merger"). In connection with the Merger, the Company will be
filing a proxy statement with the Securities and Exchange Commission (the
THE MERGER. Investors and security holders may obtain a free copy of the proxy
statement when it becomes available and other documents filed by the Company
with the SEC in connection with the Merger at the SEC's web site at
www.sec.gov. Security holders of the Company may also obtain for free a copy
of the proxy statement and other documents filed with the SEC by the Company
in connection with the Merger by contacting Nancy A. Macenko, Vice President
External Affairs, at (856) 566-4026.

          The Company and its subsidiaries and their respective directors and
executive officers may be deemed to be participants in the solicitation of
proxies from the Company's stockholders in favor of the Merger. These
directors include the following: Marilyn Ware, Gerald C. Smith, J. James Barr,
Henry G. Hager, Ross A. Webber, Frederick S. Kirkpatrick, Paul W. Ware, Nancy
Ware Wainwright, Ray J. Groves, Elizabeth H. Gemmill, William S. White,
Anthony P. Terracciano, William O. Albertini, Rhoda W. Cobb and Horace
Wilkins, Jr. and these officers include Joseph F. Hartnett, Jr., Daniel L.
Kelleher, W. Timothy Pohl, Robert D. Sievers, Ellen C. Wolf, Nancy A. Macenko
and James E. Harrison. Collectively, as of March 5, 2001, the directors and
executive officers of the Company may be deemed to beneficially own
approximately 21.9% of the outstanding shares of the Company's common stock
and under 5% of the outstanding shares of the Company's Cumulative Preferred
Stock, 5% Series. Stockholders of the Company may obtain additional
information regarding the interests of the participants by reading the proxy
statement when it becomes available.

          Forward looking statements in this report, including, without
limitation, statements relating to the Company's plans, strategies,
objectives, expectations, intentions and adequacy of resources, are made
pursuant to the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. These factors include, among others, the
following: the success of pending applications for rate increases, inability
to obtain, or to meet conditions imposed for, regulatory approval of pending
acquisitions, weather conditions that tend to extremes of temperature or
duration; availability, terms and development of capital; business abilities
and judgment of personnel; changes in, or the failure to comply with
governmental regulations, particularly those affecting the environment and
water quality; competition; success of operating initiatives, advertising and
promotional efforts; existence of adverse publicity or litigation; changes in
business strategy or plans; quality of management; general economic and
business conditions; the ability to satisfy the conditions to closing set
forth in the definitive agreement; and other factors described in filings of
the Company with the SEC. The Company undertakes no obligation to publicly
update or revise any forward looking statement, whether as a result of new
information, future events or otherwise.