Letter to the Editor: Alexandria Renew CEO on Rate Hikes

To the editor:

From reading the comments on Dana Damico’s article in the Patch on the recent increases in water cleaning rates, I can see there is a certain amount of misinformation and confusion about the water, wastewater and collection system billing and rates that I hope to clear up. I can’t speak for Virginia American Water, but I can discuss Alexandria Renew Enterprises.

First, let’s accept the fact that rate increases are driven solely by one thing: environmental mandates, driven by public desire for a clean and safe water environment. In November 2006, the Virginia Department of Environmental Quality (VDEQ) informed wastewater treatment plants throughout the Commonwealth that they would have to remove more nutrients—primarily nitrogen and phosphorus—from their treated water before it is released back into the Chesapeake Bay watershed. 

I certainly agree with one of the comments regarding pollution sources. It’s true, agriculture runoff, leaking septic tanks, pet waste, air deposition and the destruction of wetlands that act as natural filters to contaminants also contribute to the pollution that enters the Chesapeake Bay Watershed. 

But the law is the law. For wastewater treatment plants, known as “point sources,” these stringent and legally binding regulations require Alexandria Renew Enterprises to remove 62 percent more nitrogen from our treated water than before, requiring cutting edge and expensive infrastructure and technology. Contrary to what is implied in one of the comments, our facilities are not designed with the ability to get to that lower level today. Even though we employ nationally recognized best operational and business practices, it is impossible to reach the mandated removal requirements without technology and infrastructure investment.

To achieve this new level of nutrient reduction, Alexandria Renew had to embark on a massive and expensive upgrade of our already award-winning facility so we can continue to operate in compliance with federal and state mandates and not face steep fines. For us, non-compliance is not an option. Other wastewater treatment utilities in the region are confronting similar challenges, and their customers are also facing rate increases. I would like to note that in the most recent Virginia wastewater rate survey conduct by Draper Aden Associates, Alexandria Renew’s rates fell just under the statewide average of residential wastewater charges.

The largest of Alexandria Renew’s projects—the State-of-the-Art Nitrogen Upgrade (SANUP)—will cost more than $150 million. Our Capital Improvements programs—constructing facilities that support SANUP—accounted for 45 percent of our FY 2013 budget—almost $38 million. Capital investment to attain and to continually meet regulations is our biggest line item. Overall, these projects, which include upgrading our pump stations, managing our solids residual material in a sustainable way and developing a water reuse program, will cost approximately $222 million over 10 years.  It is these programs that drive the Bay Protection charge seen on your bill—regardless of the amount of wastewater generated, our facilities must have capacity reserved for each of you to use whenever you call upon it. That flat fee funds the debt service and cash investments needed to meet new regulations and update this equipment when it is at the end of its life cycle. It is just like your home—you have a mortgage to pay, which constitutes a set amount of your paycheck. Then you have monthly maintenance to keep your home functional. It is exactly what we do with your rates, but our home is appraised at $750 million!

I would also like to address the issues of transparency and public notification of the upgrade and the rate increase. There were numerous public meetings and hearings on the upgrade going back to the City of Alexandria Planning Commission Meeting in 2007. The City Council later approved this request, and last year also approved our overall plan for the new facility. We held community meetings and invited the public to comment on the plan. That process yielded some very good suggestions.

We also informed the City Council about the rate increase when it was first proposed and then yearly as the approved increases took effect. It was approved by Alexandria Renew’s Board of Directors, who are appointed by City Council. Here too, we held an advertised public meeting and hearing at our facility in 2010 and requested public comments but received none.

I understand that no one likes a rate increase. Rate increases are the only option Alexandria Renew has to pay for the mandated upgrades that we all hope will play a part in reversing the declining health of the Chesapeake Bay and continue the positive health of the Potomac River we have seen in the last 40 years. A healthy water environment fuels successful cities.

If you are interested in learning about the whole process of treating wastewater, we hope you’ll arrange for a tour of our award-winning facility, located right off of Eisenhower Avenue. Visit our website to learn more.

Sincerely,

Karen L. Pallansch
Chief Executive Officer
Alexandria Renew Enterprises