Mayor: City getting closer to refund for excessive water rate increase

Earlier this year, Alexandria got into a scrap with Virginia American Water Company (VAWC) over a rate increase. Now, Mayor Justin Wilson says the city, utility company and other parties are getting closer to a compromise.

Alexandria is one of a handful of Virginia with a private water utility provided by VAWC, a subsidiary of a large national company regulated by the State Corporation Commission (SCC). In November 2021, it applied to the SCC for a nearly 28% increase in rates, along with other charges and rate supplements.

At the time, the company claimed the increase, to the tune of $14.3 million, would fund infrastructure investments in Alexandria and three other localities. But local leaders said the rate increase was significantly beyond what had been expected. Had it gone through, Wilson says residents would have seen their bills increase by about 36%.

“After analysis, our staff determined that this rate increase was excessive and Council voted to again intervene with the State Corporation Commission to oppose this proposed rate increase,” Wilson wrote in his Council Connection newsletter, released on Sunday.

In a report filed in early December, a hearing examiner from the SCC agreed with a proposed $3.5 million reduction to the overall increase. The total proposed increase of $10.75 million is called “the stipulation.”

“The SCC appointed a hearing examiner to review the case and provide recommendations to the Commission,” Wilson wrote in the newsletter. “Last month, the hearing examiner provided his report, which largely endorsed a proposed settlement between the City, VAWC, and the SCC. This settlement will lower the increase and provide for refunds to Alexandria ratepayers. Last week, the City provided input supporting most of the hearing examiner’s findings.”

Two weeks ago, the city filed comments mostly agreeing with the findings from the report — though there remains some disagreement about additional refunds.

Wilson noted that the SCC will still need to act on these recommendations later this year and he hopes the city and VAWC can move past the disagreement — water under the bridge, so to speak.

“I’m hopeful we can continue our efforts working with VAWC to improve our aging water infrastructure but respect our ratepayers and good processes at the same time,” Wilson wrote.