City of Alexandria, Virginia
________________
MEMORANDUM
DATE: APRIL 6, 2016
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of Virginia-American Water Company's proposed rate increase (Pue-2015-00097).
BODY
_________________________________________________________________
ISSUE: Consideration of Virginia-American Water Company's proposed rate increase.
RECOMMENDATION: That City Council: (1) indicate its opposition to Virginia-American Water Company's proposed general rate case application (PUE-2015-00097) that seeks a 18.42 percent overall increase, with a 15.86 percent increase in rates in the company's Alexandria District; (2) indicate its opposition to Virginia-American Water Company's proposed Water and Wastewater Investment Service Charge (WWISC), Rate Stabilization Mechanism (RSM), and the consolidation of revenues and application of single tariff; and (3) support City participation in the State Corporation Commission rate deliberations through coordination with legal counsel and expert witnesses in partnership with the City of Hopewell and Prince George County, with City staff providing supplemental involvement and testimony as applicable.
DISCUSSION: On October 30, 2015, the Virginia-American Water Company (VAWC) - a subsidiary of American Water Works Company (NYSE: AWK) - submitted an application to the State Corporation Commission (SCC) to petition for an increase in allowable revenues and to increase customer rates (SCC assigns Case Number PUE-2015-000971).
VAWC seeks an 18.42 percent overall increase in rates across all service districts. To support their increase in allowable revenues, VAWC proposes a Rate of Return on Common Equity (ROE) of 10.75%. The effect is an increase in allowable revenues from Alexandria customers of $2,326,882 or 15.86% over current. The result is an increase in rates of approximately 22.86%, 12.31%, and 6....
Click here for full text