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.
The City of Alexandria is making it easier for locals who pitch in on flood prevention to skip out on their utility fees.
At a meeting last night, the City Council voted to adopt a series of changes to a utility fee credit program, including reducing the fee for residents who install flood mitigation on their property.
All property owners in Alexandria pay a stormwater utility fee based on the amount of impervious area — or hard surface — on their property. The Stormwater Utility Fee Credit Program allows local property owners to claim reductions on that fee.
Some of the changes should make is easier for locals to earn get that fee reduction.
“Property owners can earn credits to reduce the fee by installing and maintaining eligible stormwater management practices and filing an application to the City,” the city said in a release. “Applications can be submitted by searching for the property on the City’s Real Estate webpage or submitting a hardcopy form. Applications will be accepted from December 1 to February 15.”
According to the release, some of the changes from the meeting include:
- Simplified application process that removes duplicate items and streamlines documentation requirements
- Two-year credit applied to two consecutive calendar years – or four billing cycles – for approved applications for eligible practices
- Increased credits for individual eligible practices and increased overall potential maximum credit per application from 30% to 50%
- Previous applicants will be notified via email to reapply for the next two-year credit cycle starting in 2024
- Added credit option for preserving and maintaining existing mature trees and dry floodproofing practices
Virginia American Water, a statewide utility company, requested authority from the state to increase its rates to create a sales revenue totaling $14.3 million — a 27.6% increase over current revenues.
The City of Alexandria said under the requested rate increase, the bill for the average residential customer using 4,500 gallons of water per month would increase by about 40% — around $117 per year. Residential customers with above average water use could see their bill increase by more than 50%.
“At the direction of Alexandria City Council, the City has formally objected on behalf of Alexandria’s water customers to Virginia American Water’s request to the State Corporation Commission to raise water rates,” the city said in a release. “The City’s primary objections are that the company’s proposed return on equity, or profit margin, should be lower; the rate of bill increases should be gradual and representative of national averages; and costs of serving customers should be appropriately and fairly allocated among residential, commercial, and industrial customers.”
In the release, the City of Alexandria said the public is encouraged to submit comments opposing the requested increase with the State Corporation Commission by Sept. 20. Comments can be submitted online by picking “submit comments” for case PUR-2021-00255. The City said locals should indicate that the rate increase should be phased more gradually with a lower return on equity.
“While Virginia American Water is an important partner in Alexandria’s water system, the City has a responsibility to the community to speak up when rate increases are too aggressive,” said City Manager James Parajon. “Increases are needed from time to time in order to maintain and improve aging infrastructure, but they must be structured and paced fairly and equitably.”
The Commission is scheduled to hold a public hearing on Friday, Sept. 23, at 10 a.m. via phone and another hearing on Tuesday, Sept. 27 at the same time that will be accessible online.