Aqua Virginia seeks another large hike in rates

After winning a more-than-30% increase in water rates last year, Aqua Virginia is seeking increases of more than 25% in water and wastewater rates.

Aqua Virginia provides water and wastewater utility service in 37 Virginia counties, including Albemarle, Fluvanna, Madison, Nelson and Orange.

The company said it needs a 26.42% increase in water rates and a 29.95% increase in wastewater rates because it’s making major investments in its plant and is seeing a rise in operating costs. It is asking the State Corporation Commission to approve its request.

Under the rates Aqua Virginia seeks, a Virginia residential customer using an average of 3,472 gallons of water per day would pay roughly $907 per year for water service.

“This equates to just $2.48 per day for all the water customers and their families need for drinking, cooking, washing, gardening, etc.,” said John J. Aulbach, Aqua Virginia’s president, in a filing with the commission.

“We understand that rate increases are never easy for our customers,” he said, adding that “since Aqua Virginia’s last base rate case, the company has repaired infrastructure, replaced aged infrastructure, and incurred an increase in operating expenses.”

Aqua Virginia is investing $35.9 million in its facilities. Its plant had been valued at $216 million, before it started making those investments, SCC filings show.

The company’s filing with the commission shows its operating expenses for the 12 months that ended March 31 increased 7.2% from the year before, to $11.4 million. Its profit increased 29.8% to $7.5 million.

“As a result of these investments, as well as increases in operation expenses and other factors, Aqua Virginia is not realizing the return the Commission authorized in the last proceeding,” Aulbach said.

Aqua Virginia said that after accounting for interest on its debt, its rate of return on equity — its profit as a percentage of its net worth — was 3.35% for its water operations and 2.73% for wastewater. When the commission last year approved a 32.1% increase in its water rates and an 8.3% increase in wastewater rates, the aim was to generate a return on equity of 9.07%.

The company runs 190 water systems and nine wastewater systems, mostly in rural Virginia and in some suburban subdivisions.

The company distributes an average of 3.9 million gallons per day to more than 27,000 customers.

Among the challenges the company faces is dealing with the various ages, materials and diameters of its 611 miles of water mains, “which were installed with varying degrees of proficiency,” operations manager Matthew Cooke told the commission.

Another challenge is that several of its systems have only a single well. The company’s current investments include adding new wells in eight systems, new water meters to ensure that people aren’t charged for water they don’t use in four systems, new filters, new pumps and lift stations, and major work at a Caroline County system’s wastewater plant and at a Fluvanna County river water intake, transmission pipe and wastewater plant.

Source: www.dailyprogress.com