City of Alexandria Formally Objects to Virginia American Water Rate Increase Request and Encourages Public to Register Opposition with the State Corporation Commission
For Immediate Release: July 23, 2019
At the direction of Alexandria City Council, the City has formally objected on behalf of Alexandria’s water customers to the request by Virginia American Water to the State Corporation Commission to raise water rates. The City’s primary objections are that the company’s proposed return on equity (i.e. 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 between residential, commercial and industrial customers.
“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 Mark Jinks. “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 company has requested authority to increase its rates to produce additional annual jurisdictional sales revenues of $5.6 million, or a 10.67% increase over present pro forma revenues. The company’s request includes an annual water service rate increase of $6,024,348 or 14.48%, and a wastewater service rate decrease of $409,739 or 3.73%. The company indicates that this rate request is based on a 10.8% proposed return on equity, or the rate of profit the company desires to achieve. Under the requested rate increase, the bill for an average residential customer using 4,500 gallons of water per month would go up about $75 in the first year and about $39 in each of the second and third years.
The public is encouraged to submit comments opposing the requested increase (indicating that the return on equity should be lower and that the rate increase should be phased in more gradually) online with the State Corporation Commission by August 13, 2019, by choosing “Submit Comments” under case PUR-2018-00175. The page also includes the state order summarizing the company’s request. The order allowed the proposed rates to go into effect as of May 2019, pending future approval by the Commission.
The Commission will hold a public hearing on August 27, 2019, at 10 a.m., in the second-floor courtroom located in the Tyler Building (1300 E. Main St., Richmond). The Commission will hear from the public, the company and other stakeholders. Members of the public desiring to speak at the hearing should arrive at least 15 minutes in advance to register with the bailiff.
The City does not operate utilities. Virginia American Water is the privately-owned, for-profit provider of drinking water in Alexandria. The company provides tips on its website for reducing water use.
For media inquiries regarding the City’s intervention in this case, contact Andrea Blackford, Senior Communications Officer, at email@example.com or 703.746.3959.
For media inquiries regarding Virginia American Water Company’s rate request or the State Corporation Commission’s hearing of the case, contact those organizations.
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This news release is available at alexandriava.gov/110719.