The State Corporation Commission has approved a reduced rate increase for Aqua Virginia, Inc. The company services multiple water and sewer systems throughout Virginia.
The SCC decision means customers of these systems are due a refund, with interest, of all amounts that have been over-collected since the company imposed an interim rate increase on January 5, 2015. By law, interim rates are permitted pending a final decision of the Commission.
In August 2014, Aqua Virginia requested the SCC approve a rate increase to produce an increase in water revenues of approximately $1.3 million and an increase in wastewater revenues of approximately $406,000. The Commission determined that an increase of approximately $1.1 million in water revenues and $314,000 in wastewater revenues is reasonable.
Throughout the course of case proceedings, the SCC heard from 120 public witnesses and received over 1,150 written comments. As noted in the final order, “We recognize the concerns expressed by Aqua Virginia customers in this case…and are keenly aware that many of Aqua Virginia’s customers have been subject to multiple rate increases over the last few years…We also recognize the substantial capital improvements the Company has made to recently-acquired systems that were in poor condition and not able to provide adequate service or meet regulatory standards…”
The Commission set a new return on equity of 9.25 percent for Aqua Virginia. The company was seeking a return of 10.3 percent.
Also approved is Aqua Virginia’s request to reduce the current five water groups to three, and the current three wastewater groups to two in an effort to “reasonably balance the need to promote gradualism with the goal of moving toward a consolidated rate structure,” as stated in the final order.
The SCC stated that its decisions in this case are in accordance with Virginia law and do not exceed the total costs incurred by Aqua Virginia in serving its customers.