City Council on Tuesday night squelched plans by Virginia American Water to raise rates in Alexandria by 12.2 percent, saying some sort of increase is acceptable but not as large as requested.
The water company filed with the State Corporation Commission seeking a 15.93 percent overall increase and specifically a 12.2 percent increase for the Alexandria district.
Rates for Alexandria customers would have increased from $47.73 to $53.53 per quarter for a typical customer using 14,400 gallons of water.
If city water bills increased 12.2 percent, the city’s water bill would increase $71,000 per quarter.
The proposed overall 15.93 percent increase was driven largely by new improvements in the water company's Hopewell and Prince William County service areas. The water sold in the Alexandria district is purchased from the Fairfax County Water Authority. Staff also expressed concerns that Alexandria residents should not have to pay more because of uncertain demand from industrial customers in Hopewell.
According to Virginia American Water Company President William Walsh, the Alexandria rate filing reflects investment the firm is making in the city between September 2011 and June 2013.
City staff didn’t support the request for various reasons, including that the water company’s calculations considered the company as a whole and did not specifically break out Alexandria's numbers.
Additionally, “while baseline water use may be slightly decreasing, the overall water rate base and water demand is increasing in the Alexandria District due to substantial new residential and commercial development in the City,” said a memo from City Manager Rashad Young to the mayor and City Council.
Because of that, staff believes that Alexandria customers’ solid and consistent revenue stream, coupled with little risk of supply water availability, substantially reduces revenue generation and cost risks.