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Water supplier using faulty data for rate increase, Alexandria says
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WASHINGTON (Map, News) - The company that supplies water to Alexandria appears to be using faulty data to justify a 17 percent rate increase in the city, Alexandria city staff said.
Virginia American Water is asking the state to approve a rate increase that would raise the average water bill in Alexandria and Prince William County by 16 to 17 percent, citing higher water treatment, water delivery and infrastructure costs.
City staff agreed that the $10 million in infrastructure investment the company has made since 2003 — the year of its last rate increase — warrants a slight new increase.
But after conducting their own analysis of the state documents filed by the company, Alexandria officials found that Virginia American Water said that its number of customer meter billings dropped by 505 between 2003 and 2006, and it needs to make up the revenue.
“They’re covering a lot of fixed costs — the way the rate system works, it’s to their advantage to show they have fewer customers and less water used,” Deputy City Manager Mark Jinks said.
“But it’s counterintuitive that the number of customers would be down — we’ve clearly added more residents to the city every single year for the last decade,” he said.
Alexandria’s population grew by 8,051 people between 2003 and 2006, according to the U.S. Census Bureau.
A spokeswoman for Virginia American said the company arrived at its number by counting its water meter readings, and that vacant houses or offices could contribute to the drop.
Virginia American Water is the city’s only water supplier.
The city has consistently filed formal comments with the Virginia State Corporation Commission, the agency that regulates utilities, challenging the company’s rate increase requests.
In 2003, the company asked for an increase of 8.15 percent, but the state approved 3.5 percent.
In 2000, the company requested a 5.21 percent increase and won 2.97 percent.
In a memo to the City Council, city staff speculated that the company, which is owned by German-based RWE, is asking for the dramatic rate increase to raise revenue before RWE spins American Water off into its own company — a move RWE has said it is planning.
“The higher the returns to the water company are, the higher the stock offering price could be,” the memo said.
The state’s public hearing on the increase is scheduled for Sept. 11, but the rate increase is set to go into effect July 8. If the state finds the increase is unwarranted, customers will be refunded the extra money, plus interest.
tluntz@dcexaminer.com
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9:54 AM MST on Tue., Jun. 24, 2008 re: "Sewage, water rates to rise in Baltimore County"
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Johnny Apple seed said:
State law superseids County. Enforce the State No building moratoriums within 200 feet of sewage and all wataerways, without permit and I will gladly pay more for water, period. OCD
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NTD said:
“Much of this work has been neglected and has to be done all at once,” Well then maybe we should take all of the cost for their neglect out of the paychecks of those who failed to do their job in the first place. So essentially they got paid for not doing their job, but now the taxpayers have to pay more for someting that should have been done already? Start with Jim Smith and the director of Public Works
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Examiner Reader said:
And this is why things should not be just passed off with the "we'll get to it later" mentality. Now we'll pay more for water and electricity due to short sightedness of those that are in charge. Don't wait til it breaks to fix it, take some initiative and do preventative work.
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joep said:
Here we go agaim!
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Examiner Reader said:
Goverment people don't know how to fix a pipe.They can't do anything right! They are mean !
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joek said:
I live in Federal Hill and have been seeing broken mains and pipes spouting water like Old Faithful daily for the last two months. Check out the constant flow of hundreds of gallons per minute at William and West streets! Is this rate hike to pay for their incompetence at not knowing how to fix a pipe in the first place?
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Examiner Reader said:
I'm tired of the only discounts and assistance programs going to those who earn less than $25,000. It is those of us that earn between$25,000 and $80,000 that are hit hardest and struggling with oppressive debt. A person earning less than $25,000 is less likely to have a mortgage, a high BGE bill with no opportunity for asistance, or a car payment coupled with the exorbitant gas prices that must be used every day to go back and forth to work, etc. Not to mention the city's ridiculessly high property taxes and vehicle insurance.
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Examiner Reader said:
It never ends ! Every day they find new ways to steal our hard earned dollars.What a shameful bunch of greedy power hungry People ! They are mean !
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