ALEXANDRIA, Va. (November 2, 2018) – Virginia American Water today filed a general rate application with the State Corporation Commission (SCC) requesting an overall increase in rates of $5.6 million.
“The company is requesting this increase based on approximately $98 million of infrastructure upgrades,” said Barry Suits, Virginia American Water president. "These infrastructure improvements help to ensure continued water quality, service reliability and fire protection for our customers in Alexandria, Dale City, Hopewell and the Northern Neck who depend on us every day.”
The requested revenue increase incorporates savings associated with the Tax Cuts and Jobs Act of 2017 which accounts for the reduction in the corporate federal income tax rate from 35 percent to 21 percent, which became effective on January 1, 2018.
Some of the company’s critical infrastructure projects included in the rate request:
- New domestic and industrial pump stations and conversion from chlorine gas to a ultraviolet system at Hopewell treatment plant. In addition, the company is making plant improvements to address source water issues that impact taste and odor.
- Replacement of water mains that have reached the end of their useful lives throughout the city of Alexandria.
- Water and wastewater infrastructure replacements and improvements in the Prince William District.
- Upgraded well and water main replacements in the Eastern District in and around Virginia’s Northern Neck.
“According to the latest report card issued by the American Society of Civil Engineers last year, the U.S.’s water infrastructure was graded a ‘D’ and the wastewater infrastructure received a ‘D+.’ Virginia American Water is committed to proactively upgrading our water and wastewater infrastructure to ensure the reliability of our services,” said Suits.
Suits added that the company’s operating expenses have remained relatively flat since its last rate order.
As part of the rate application, Virginia American Water is incorporating consolidated tariff pricing in a gradual manner consistent with Senate Bill 1492, which was signed in 2017. The result of the gradual move to consolidated pricing is that the cost of water will remain different per district until 2021, at which point all water customers in Virginia American Water residential districts will have the same base rates.
Interim rates based on the company’s proposed increase of approximately $5.6 million, or 10.64 percent of current revenues, are planned to take effect on May 1, 2019, though it could take nine months or longer for the SCC to make its final decision. Final rates are subject to the SCC’s final decision, which includes a thorough public review of Virginia American Water’s rate application.