Virginia American Water Files Rate Request With Virginia State Corporation Commission

ALEXANDRIA, Va.--(BUSINESS WIRE)--Virginia American Water today filed a general rate case application with the State Corporation Commission (SCC) requesting an increase in total revenues of approximately $8.69 million. The rate application seeks recovery of additional system investments of approximately $53 million since approval of the company’s last rate case filed in 2012.

“This case is fundamentally about investments in infrastructure,” says Virginia American Water President William Walsh. “Our efforts to slow and mitigate cost increases have been very successful, due to prudent investments that permit us to work smarter, such as investments in technology, and improved work processes to dispatch the workforce and equipment more efficiently. In fact, operations expenses have actually decreased by about 2 percent since the last rate case. These savings offset some of the revenue requirement requested for capital improvements in this case,” Walsh added.

In its oldest service area, the City of Alexandria, Virginia American Water has been replacing three miles of water mains per year. Elsewhere, infrastructure investments include a one million-gallon storage tank rehabilitation in Prince William in 2013 and replacement of a 2.5-million-gallon clearwell in Hopewell in 2014.

The rate request affects customers in the company’s Alexandria, Hopewell, Prince William and Eastern District service areas. As proposed, rates for Virginia American Water’s residential customers would change as follows:

• Alexandria – From $16.40 to $20.08 per month for the typical residential customer using 4,500 gallons per month.
• Hopewell – From $27.76 to $36.90 per month for the typical residential customer using 4,500 gallons per month.
• Prince William –
  • For water customers, the rate will go from $72.93 per quarter to $95.88 per quarter (approximately $31.96 per month) for the typical residential customer using 15,600 gallons per quarter.
  • For wastewater customers, the rate will go from a flat rate of $101.65 per quarter to a volumetric rate of $118.68 per quarter (approximately $39.56 per month for 15,600 gallons per quarter).
  • For both water and wastewater customers, billing will also transition to monthly as it is in the Alexandria and Hopewell service areas already.
  • In addition, water and wastewater bills will be integrated, and mailed together on one bill, rather than billed separately. This is enabled by the completion of the migration of its wastewater customers (from the 2013 acquisition of Dale Service Corporation) into Virginia American Water’s billing software.
• Eastern – From $109.56 to $138.60 bi-monthly for the typical residential customer using 6,000 gallons bi-monthly.

For all districts, Virginia American Water is also requesting a Water and Wastewater Infrastructure Service Charge of approximately one to five percent of monthly bills to enable ongoing investments to sustain replacement of critical infrastructure, and decrease the need for large or more frequent rate increases.

Although the amounts shown above do not include taxes, surcharges or third-party billings, the proposed cost of water service in all four Virginia American Water districts would remain at about one penny per gallon.

“The regulatory process for rate setting is fully transparent and incredibly rigorous. It considers the needs of the customer as well as the company’s ability to continue to reinvest in the infrastructure to deliver high-quality water service,” said Walsh. “We have consistently met or surpassed all drinking water quality standards and nutrient discharge standards established by the United States Environmental Protection Agency, the Virginia Department of Environmental Quality, and the Virginia Department of Health, and we remain committed to providing quality water and wastewater service in all aspects of operations.”

The proposed rates are planned to take effect on April 1, 2016, though it could take nine months or longer for the Commission to make a final decision. When the proposed rates are put into effect, customers will receive information explaining these rates. The proposed rates are subject to refund based on the SCC’s final decision on the amount of the actual increase, which will follow an extensive review of Virginia American Water’s rate application. For more information, customers can contact Virginia American Water’s customer service center at 1-800-452-6863.

About Virginia American Water

Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 339,000 people. Founded in 1886, American Water is the largest and most geographically diverse publicly traded U.S. water and wastewater utility company. Headquartered in Voorhees, N.J., the company employs 6,800 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com.