Refunds For Alexandria Water Utility Customers Expected

ALEXANDRIA, VA — After the city government successfully challenged the rate increase proposed by Alexandria's water utility, customers face a smaller rate increase than the utility has been using as the interim rate. That means customers will have refunds coming soon.

This spring, the Virginia State Corporation Commission ordered a settlement allowing Virginia American Water to overall increase rates by $10.75 million, which impacts customers in the City of Alexandria, part of Prince William County and several other Virginia localities. That's lower than the overall rate of $14.3 million the water utility provider requested and had been using as an interim rate since May 2022.

Virginia American Water previously announced refunds will be issued to customers, and the city confirmed refunds will come by July 24. Along with refunds based on the higher interim rate, refunds will be issued for surcharges that appeared on bills between 2019 and 2021, according to city government.

"Our residents expect reliable and safe drinking water, at a reasonable rate," said City of Alexandria Mayor Justin Wilson in response to the settlement. "The City will continue to work with private utilities, public regulators and policymakers to protect Alexandria's ratepayers."

The refunds to Alexandria customers will equal the difference between the higher interim rate since May 2022 and the final rate. For example, a customer using 4,000 gallons of water per month in Alexandria will see a $2.54 decrease per month.

City attorneys had opposed Virginia American Water's full rate increases proposed in November 2021. The city government called for a lower profit margin for the water utility and for rate increases to be gradual and reflect national averages.

As a regulated utility, Virginia American Water must apply with the State Corporation Commission to set water utility rates and demonstrate the cost of service, including construction, maintenance, operation, administration, taxes and financing. After review, the State Corporation Commission sets the utility company's rates.

Virginia American Water implemented interim rates on May 1, 2022 subject to refund depending on the final rate set by the Virginia State Corporation Commission. The settlement means the final rates are lower than the interim rates the utility has been charging customers.

In a previous news release, Virginia American Water said it requested the $14.3 million rate increase to the $137.6 million in infrastructure investments the company has been making from May 2020 through April 2023. In Alexandria, the infrastructure projects include the replacement of water main in Alexandria to improve water pressure for business and residential customers as well as for fire protection.

Customers who are having trouble paying their water bill can seek payment arrangements or budget billing options through virginiaamwater.com.