Local hearing set March 18 on Aqua Virginia rate hike

Posted on Thursday, March 5, 2015 at 9:40 am

By Sarah Vogelsong / CP Reporter

A Board of Supervisors request and public outcry over Aqua Virginia’s proposal for a water and wastewater rate increase has led the Virginia State Corporation Commission to schedule two local hearings on the matter in March.

A ruling from SCC hearing examiner Howard Anderson dated Feb. 20 orders that hearings be held at the Caroline Community Services Center at 2 p.m. and 7 p.m. on March 18. The previously scheduled hearing in Richmond will also take place as planned at 10 a.m. March 24.

“I was really happy they did this,” said Western Caroline Supervisor Jeff Black, an outspoken opponent of the rate increase. “It’s an easier opportunity for the people of Caroline to speak out.”

The rate increase, filed by Aqua Virginia in August 2014, marks the company’s fourth such increase affecting Caroline over the past decade. But although county officials and county residents have mounted efforts to oppose increases in prior cases, citizens have been forced to travel to Richmond to make comments at SCC hearings.

“It’s not unusual for the Commission to hold local hearings when there is a specific area of impact,” said Kenneth Schrad, director of the SCC’s Division of Information Resources. Such hearings may be scheduled, he said, in response to projected impacts on the area, the volume of public input, or a request from a local government.

Caroline County filed a motion for a local hearing with the SCC Feb. 12 after receiving news that the Commission had scheduled two local hearings on the rate increase in Fluvanna County.

A Jan. 26 ruling by Anderson stated that he had found it “appropriate” to schedule the Fluvanna County hearings “due to the volume of letters in opposition filed by customers of Aqua Virginia.”

With unanimous agreement from the Caroline Board of Supervisors at their Feb. 10 meeting, the county petitioned the SCC to schedule hearings in Caroline on the grounds that “there is equal interest in Caroline County in opposing Aqua Virginia’s rate increase request.”

At least 21 public comments opposing the rate increase have been filed with the SCC by Caroline citizens over the past several months. Most cite the financial hardship another rate increase would inflict on them; many take issue with Aqua Virginia’s argument that increases are needed to pay for infrastructure improvements.

A letter to the SCC from state Rep. Margaret Ransone and state Sen. Ryan McDougle also condemns the increase, asking the Commission “to consider how the increased cost of this service charge and rate increase negatively impacts residents of this region, and specifically examine the size of the rate increase compared to the value of the infrastructure improvements that have been made to this region.”

The rate increases are expected to affect almost 6,000 residents in Caroline in communities including Lake Land’Or, Lake Heritage, Elsinore, Campbell’s Creek, Bridlewoods, and the Countryside Apartments.

An email from Aqua Virginia spokeswoman Gretchen Toner from this past October stated that although Aqua had recently acquired Lake Caroline’s water system, that community was not included in the rate case.

The proposed increases vary by community. According to Toner, for instance, sewer rates are supposed to increase by 4.4 percent for Lake Land’Or customers, but by 12.8 percent for Campbell’s Creek customers.

These variable increases are part of a gradual process of rate consolidation throughout the Aqua Virginia network that aims to eventually organize all water and wastewater systems into a uniform cost structure.

Currently, Aqua Virginia’s water systems are organized into five rate groups and their wastewater systems into three rate groups. If the SCC grants the company’s petition, these groups would be reduced to three and two tiers, respectively.

Caroline County’s Feb. 12 petition to the SCC states that overall, the increases would produce monthly billing increases for most county residents of “between 14-16 percent for water, 4-4.5 percent for sewer, and 7-8 percent for combined water and sewer depending on average monthly usage.”

Direct testimony to the SCC from Aqua Virginia president Shannon Becker filed Aug. 1 cites infrastructure improvements made by Aqua over the past three years as justification for the rate increase.

“As a result of this investment,” Becker’s testimony states, “as well as the increases in operations expenses and reductions in average consumption, the Company is not realizing the return the Commission authorized in the last proceeding.”

Aqua Manager of Operations Tim Castillo testified in the Aug. 1 filing that capital improvements affecting the Piedmont Central region, which includes Caroline County, over the past three years have included significant work on the Lake Land’Or wastewater treatment plant, upgraded water mains, the installation of emergency power generators, and the rehabilitation and drilling of several new wells.

The company expects the rate increase to generate a $1.3 million increase in water revenues and a $400,000 increase in wastewater revenues.

Any member of the public who wishes to speak at the March 18 hearings in Caroline may participate in the hearing unless he or she has filed to participate in the case as a respondent.

Schrad noted that there appears to have been confusion among citizens regarding the difference between a public respondent and a public witness. A public respondent is considered to be a formal party to the legal proceedings, while a public witness provides oral testimony at a hearing.

The hearing examiner’s Feb. 20 ruling states that if individuals have mistakenly filed as respondents, they may inform the examiner at one of the hearings of their desire to change their status to public witness and then offer testimony.

 

A separate case filed by Aqua Virginia in conjunction with the Virginia American Water Company and the Massanutten Public Service Corporation that would allow water and wastewater companies to establish an infrastructure service charge is also being considered by the SCC. A hearing will be held on this case March 10 in Richmond. No local hearings have been scheduled on the matter.

 

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