2018 RATE APPLICATION FAQS
Are water rates regulated?
Yes. Virginia American Water is regulated by the Virginia State Corporation Commission (SCC). As part of the rate filing, we submitted extensive financial and operational data documenting the cost of doing business. The SCC will review this information, along with the information provided by customers and the public at input hearings. This open and thorough process provides the SCC with the necessary information to make an informed decision.
When did Virginia American Water request the rate change?
Virginia American Water filed for a rate change with the SCC on November 2, 2018.
When will new rates become effective?
Virginia American Water implemented interim rates based on the company’s proposed increase of approximately $5.6 million, or 10.64 percent of current revenues on May 1, 2019. Final new rates will only take effect once the SCC makes a final decision, which could take months.
How will this rate increase affect my monthly bill?
Virginia American Water is regulated by the SCC. The SCC might grant all, some or none of the request. As a result, the rate charged to customers might be different than the rate requested by the company.
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.
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. This will stabilize rates over the long run and smooth out rate increases over time to the extent that rate increases are necessary to properly maintain the investment.
If approved as requested, the monthly base rate for residential water customers in all districts (Alexandria, Hopewell, Prince William and Eastern) using 4,500 gallons of water per month will be $32.82 per month in Year 3 (2021) of the rate request.
Even with the proposed increase, the cost of high-quality, reliable, 24-hour water and wastewater service would continue to be among the lowest household utility bills, at about a penny per gallon.
The cost of wastewater service in the Prince William district will decrease.
To find out how your rates would change based on your usage amount, please contact our customer service center at 1-800-452-6863, Monday to Friday, 7 a.m. to 7 p.m.
What are the primary reasons for Virginia American Water’s rate request?
The rate increase is needed primarily because Virginia American Water is investing approximately $98 million in treatment and distribution facilities to continue to provide safe, reliable water and wastewater service. These investments are critical to the public’s health and safety in Alexandria, Dale City, Hopewell and the Northern Neck. Some of the company’s critical infrastructure projects included in the rate request are:
- Replacement of water mains that have reached the end of their useful lives throughout the city of Alexandria.
- New domestic and industrial pump stations and conversion from chlorine gas to sodium hypochlorite at the Hopewell treatment plant. In addition, the company is making plant improvements to address source water issues that impact taste and odor.
- 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.
If we were to receive our full rate request, the cost of high-quality, reliable, 24-hour water and wastewater service would continue to be among the lowest household utility bills, at about a penny per gallon.
What has Virginia American Water done to control costs?
Virginia American Water employs best management practices and cost containment techniques, while taking advantage of economies of scale to enhance efficiencies and manage operational costs. As a result of these measures, when compared to the company’s last rate case, costs related to operations and maintenance expenses have remained relatively flat. Many of these enhancements have been in place for a number of years, such as:
- Computer monitoring control systems in most of our treatment facilities, which minimize both operating costs and personnel needs.
- Centralized bulk purchasing of chemicals, supplies, materials, insurance and employee benefits.
- Centralized financial accounting, payroll and cash management systems.
- Customer service programs to better manage work load for field service reps. For example, laptops were installed in service vehicles, moving us from a paper-based to a real-time work distribution system. Information is communicated to and from the field using wireless technology, which has enabled our field representatives to better manage their work load.
- Installation of automated meter reading systems, which increases efficiency and bill accuracy while reducing labor costs.
- Investment in leak detection equipment/programs to minimize water lost through water mains.
Sharing costs with other American Water companies to take advantage of one of the most advanced water testing laboratories in the nation. This laboratory processes the most sophisticated water quality tests for Virginia American Water at a cost which is less than what the tests would cost if completed at independent testing laboratories.
I’m on a fixed income. Do you have any programs that assist low-income customers?
Yes. Since 2010, Virginia American Water has been assisting customers in need pay for their water bill through its H2O Help to Others Program™.The program offers grants of up to $500 per year for customers who qualify. Since the program was first launched in 2010, Virginia American Water has provided $38,669 in water assistance grants to 220 households. Grants are funded through a corporate donation and customer and employee donations.
To be eligible for the program, grant recipients must have received a utility shutoff notice or have already had service disconnected. Recipients must also have made a sincere effort to pay the bill (at least $50 on the outstanding water bill in the past 90 days), applied for all open and available state and federal programs, and have a household income at or below 150 percent of the federal poverty income guidelines. A grant from this program may not cover the recipient’s entire water bill.
Virginia American Water’s H2O Help to Others Program™ program is administered by the Dollar Energy Fund, an independent, non-profit organization. For more information about the program and additional qualification requirements, contact the Dollar Energy Fund at 1-888-282-6816 or visit The Dollar Energy Fund online at www.dollarenergyfund.org.
For more information
If you have additional questions, please contact our customer service center at 1-800-452-6863, Monday to Friday, 7 a.m. to 7 p.m.