City of Alexandria, Virginia
________________
MEMORANDUM
DATE: APRIL 3, 2019
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Virginia American Water Company Rate Case (PUE-2018-00175).
BODY
_________________________________________________________________
ISSUE: Consideration of Virginia American Water Company's proposed rate increase.
RECOMMENDATION: That City Council:
1) Indicate to the State Corporation Commission (SCC) the City's opposition to Virginia American Water Company's (VAWC) proposed 15.84%1 overall increase in revenue requirement over a 3-year period and resulting rate increases, including the proposed 10.8% Rate of Return on Common Equity;
2) Advocate for a more gradual introduction of consolidated revenue requirements and application of single tariff across all districts to lessen the sharp increase in rates proposed to be borne by customers in the Alexandria District;
3) Ask staff to continue to investigate the benefits and trade-offs of selling the City's fire hydrants to VAWC;
4) Oppose VAWC's proposal to establish the Water and Wastewater Infrastructure Service Charge (WWISC) as a permanent program until the authorized pilot is complete and undergoes thorough and thoughtful cost and benefit evaluation by the SCC.
BACKGROUND: The Virginia American Water Company (VAWC) is a public water utility affected with the public interest to provide the essential service of water treatment and delivery to individuals and businesses. A public water utility is uniquely able to wholly provide the treatment and delivery of water more efficiently and effectively than a collection of smaller water utilities could otherwise provide and is considered a natural monopoly. Natural monopolies like a public water utility lack market competition and are subject to economic regulation. Economic regulation includes the public or governmental intervention to ensure the provision of safe,...
Click here for full text