The Virginia State Corporation Commission (SCC) has issued an order that approves new rates for Virginia American Water after a 19-month review.

The new rates are for the company’s 60,000 drinking water and 20,000 wastewater customers in the City of Alexandria, the City of Hopewell, a portion of Prince George County in the Hopewell District, a portion of Prince William County and the Eastern District service area in and around Virginia’s Northern Neck.  

Across Virginia American Water’s service districts, the cost of a gallon of water will remain about a penny per gallon.

The need for increased rates is based primarily on the approximate $53 million in infrastructure improvements Virginia American Water has made since its last rate request in 2012.

These improvements to help ensure high-quality, reliable service include pipe replacements, system reinforcement projects, equipment purchases and replacements and plant upgrades.

The company also continued its efforts to manage costs, showing a 2 percent decrease in operation and maintenance expenses since the last filing four years ago. This savings offsets some of the revenue requirement requested for capital improvements.

“We appreciate the transparent and thorough SCC review process and the opportunity for the public to provide input,” said Barry Suits, president, Virginia American Water. “We are committed to providing a high level of service to our customers through investing in our infrastructure and treatment plants to maintain the capacity and reliability. Even with the rate increase approved by the SCC, our water services remain a remarkable value.”

The order approved an additional $5.2million in annualized revenue. As permitted by SCC regulations, on April 1, 2016, Virginia American Water put into effect the rates it proposed when it filed the rate request on October 30, 2015. The rates the SCC has approved are lower than those requested and put into effect on an interim basis in April 2016.

As a result, most Virginia American Water customers will now see a lower rate on their water bills. The company will refund the difference from their current bill amount to the final rate set by the SCC. Refunds will include interest using the Federal Reserve’s “bank prime loan” rate and will be credited to customers’ bills within 90 days.