Water Company Files for Rate Increase

Water Company Files for Rate Increase

Rates have increased only four times in 10 years

July 11, 2002

Alexandrians can expect to begin paying higher water bills by the end of 2002 if Virginia American Water Co.'s (VAWC) rate increase request is approved by the State Corporation Commission.

On June 24, the company filed for an increase in rates of $237,000, which represents a 1.65-percent boost in total revenues. It translates to an average increase of 88 cents per quarter for Alexandria residential users, according to VAWC calculations.

"The driving factor influencing this filing is the revenue requirement associated with the company's capital investment," said Steven T. Edgemon, VAWC vice president and manager.

VAWC has invested approximately $2.6 million since its last adjustment, primarily in replacement of 5,000 feet of water mains, according to the company.

"The earliest the new rates can go into effect is Nov. 22, 2002," said Mickey Bivins, VAWC office manager. "That is the end of the 150-day suspension period."

A SUSPENSION period gives the Commission time to study the request and make its determination as to whether it will approve or deny the request and, if approved, whether the amount requested is appropriate, according to Bivins.

"Following the filing, the Commission has 30 days to make sure the filing is complete. Then we can advertise the rate increase in the newspaper. It will amount to less than 1 cent per day on the average quarterly bill," Bivins said.

"I am pleased VAWC was able to keep this rate filing well below the rate of inflation. Our continued efforts to contain operating and maintenance costs, along with new growth in the city, have successfully offset inflationary increases, fuel and energy cost increases, and decreases in customer water usages," Edgemon said.

The Commission hearing process could continue into 2003. "If the amount requested is not granted by the Commission, the difference will be refunded to our customers," Bivins noted.

Alexandria's increase is only one portion of a larger request totaling $1,063,000, which will produce a 3.49-percent increase in revenues. In addition to Alexandria, this increase also impacts VAWC customers in Hopewell and Prince William districts.

Bivins pointed out the last rate increase went into effect July 20, 2001. However, under that filing, the Commission approved no increase for Alexandria. Refunds from that request began June 1 and are scheduled for completion in August.

No other fees will be increased as a result of this filing, according to VAWC. This increase will apply equally to all user groups, residential, commercial and industrial.

Since 1991, VAWC Alexandria District rates have been increased four times for an average of 1.10 percent. During that same period, the Consumer Price Index has escalated 3.88 percent.