Washington, D.C. 20549

                                 SCHEDULE 14A

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

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                      AMERICAN WATER WORKS COMPANY, INC.
             (Name of each Registrant as Specified in its Charter)

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American Water Works Position Paper
Significance of Consolidation and the Proposed RWE Acquisition


Reliable water service, which is essential to community health, safety and
economic prosperity, requires:

     o    Access to massive amounts of new capital for investment
     o    Unique professional and technical talent, and
     o    Sophisticated regional planning, investment and operations for the
          long term.

Large financial investments are constantly required to fund community
development and to address environmental regulation, the demands of
technology, and the need to upgrade and replace the aging infrastructure in
our communities. At the same time, customers are using less water.

In other words, the amount of investment for each customer has increased while
water use by each customer is dropping. As a result, professional water
systems must constantly look for ways to operate most cost effectively.

The Trend Toward Consolidation

The United States has about 54,000 water systems which has resulted in a
significant amount of fragmentation. The large number of systems, most of
which serve fewer than 5,000 customers, makes the water utility industry ripe
for consolidation. It's one of the most significant initiatives in the search
for cost efficiency and operational expertise.

Consolidation creates size and stability that increases the capacity to
attract capital at a lower cost. It also enhances regional planning and
expands a company's capability to attract and retain professional and
technical talent.

Consolidation and American Water Works

At American Water Works, we have been able to enhance our ability to address
water resource issues across the United States through a series of
consolidations. This started with the coming together of more than 100 small
water companies in the late 19th and early 20th centuries, and has continued
right up through today. We invest capital and combine resources to ensure
reliable water services in 1,300 communities throughout 23 states. These
actions have resulted in enhanced service to consumers at a lower cost than
otherwise possible.

Continued . . .


Continuing Consolidation

American Water, a New Jersey-based company, owns water systems in states
stretching from New England to Hawaii. This cross-country reach, which has
been achieved through consolidation, has not interfered with, disrupted, or
otherwise compromised the regulation or control of the water resources in
local communities. To the contrary, there is clear evidence that water system
consolidation has enhanced essential long-term policy planning and
implementation in the communities we serve.

The proposed acquisition of American Water by RWE is the next logical step in
our company's focus on consolidation. It is perfectly consistent with our
financial and operational strategies that have proven the value of
consolidation in the past. Once the transaction is complete, American Water
will join with Thames Water, an RWE company that operates water and wastewater
systems in London and in several other major markets worldwide.

Our relationship with RWE/Thames will present enhanced access to capital at
lower long-term costs than would be available to American Water independently.
It will also significantly expand our access to technical and professional
resources to address complex operational, environmental and engineering issues
associated with delivering reliable water services. This will be accomplished
under the same local, regional and state regulatory oversight that is in place

Underpinnings of Agreement

American Water carefully considered the acquisition proposal from RWE from
three critical perspectives:

     o    The investor
     o    The customers and community
     o    The employees of the company

In each case we concluded that this transaction will enhance and improve what
we do, and it will allow us to continue to deliver the essential public
service that water represents, at a lower cost than otherwise possible.

                                     * * *

         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.