NOTICE TO THE PUBLIC OF AN APPLICATION BY AQUA VIRGINIA, INC., FOR A GENERAL INCREASE IN RATES AND FOR AUTHORITY TO REVISE THE TERMS AND CONDITIONS APPLICABLE TO WATER AND WASTEWATER SERVICE CASE NO. PUR-2020-00106 [Free read]

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  • Aqua Virginia Inc. (“Aqua”) has applied for approval
    of a general increase in rates.
  • Aqua requests a total annual increase in revenue requirement of about $1.7 million per year.
  • A Hearing Examiner appointed by the Commission will hear the case on April 20, 2021.
  • Further information about this case is available on the State Corporation Commission’s website at:
    https://scc.virginia.gov/pages/Case-Information

On July 30, 2020, Aqua Virginia, Inc. (“Aqua” or “Company”), filed with the State Corporation Commission (“Commission”) an application pursuant to Chapter 10 of Title 56 (§ 56-232 et seq.) of the Code of Virginia (“Code”) requesting authority to increase its rates and charges and to revise other terms and conditions applicable to its water and wastewater service (“Application”).

As noted by the Company, Aqua comprises 168 water and 9 wastewater systems in 37 counties across the Commonwealth. Per Aqua, the Company serves approximately 33,000 customers, 97% of which are residential ratepayers; only a small portion of the remaining 3% of Aqua’s customers are governmental.

Aqua indicates that the proposed rates and charges are designed to increase the Company’s annual rate base revenue by approximately $1,732,585 per year to produce an increase in water revenues of $1,475,615 and an increase in wastewater revenues of $256,970. The requested increases constitute a 10.8% increase in water revenues and a 3.4% increase in wastewater revenues, for a combined increase of 8.2%.

Aqua states that the requested increase in annual base rate revenue reflects its costs and revenues for the twelve-month Test Year ended March 31, 2020. The Company has proposed as appropriate for ratemaking purposes, a capital structure consisting of 50.42% long-term debt, 1.08% short-term debt and 48.49% common equity and an authorized return on equity capital of 11.20%.

Aqua has also included in its Application a request for its recorded COVID-19-related expenses in the amount of $153,913, presently booked as a regulatory asset for accounting purposes. Aqua requests a three-year normalization of the COVID-19-related costs, which represent costs incurred from April 1, 2020 and projected through December 31, 2020. The Company’s Application also includes pro forma adjustments for Aqua’s Water and Wastewater Infrastructure Surcharge (“WWISC”) revenue requirement. Per Aqua, the Company’s WWISC Rider has, accordingly, been reset to zero. As further basis for its requested increase to its rates and charges, the Company cites operational efficiency improvements, water and wastewater system capital investments and cost of capital treatment for information technology assets.

Through its Application, Aqua also seeks to further combine its water and wastewater groups towards the uniform consolidated rates for water and sewer service required by Virginia law. The Company proposes reducing the current three water rate groups (W1, W2, W3) to two (W1 and W2), and establishing new rate groups WO and SO for certain water and sewer systems whose rates are significantly below those of current Rate Groups W1 and S1. Non-consolidated systems whose current rates are similar to those of current Rate Groups have been assigned to those current groups whose rates they most closely match.

The Company states that this proposal continues to reduce the

differences between the rate groups and implements movement toward uniform water and wastewater rates while adhering to the goals of gradualism and the avoidance/minimization of rate shock in utility rate increases. Details concerning these proposed rate group changes are provided in the Company’s Schedules 42 and 43 attached to the Application.

The rates proposed for water and wastewater service in this Application are as follows:

WATER SERVICE RATE SCHEDULE BY GROUP –
Water 0 (WO), Water 1 (W1), and Water 2 (W2)

METERED ACCOUNTS: Metered connections shall be charged the monthly base facility charge plus the gallonage charge for all gallons used as set forth below:

Base Facilities Charge Water Group 0: (Residential and Non-residential) – No bill will be rendered for less than the minimum charge set forth below:

Monthly Water Base Facility Charge – Water Group 0 (W0)

Meter Size WO Gallons Included in Allowance
Less than 1” $25.30 3,000
1″ $63.25 7,500
1½” $126.50 15,000
2″ $202.40 24,000
3″ $404.80 48,000
4″ $632.50 75,000
6″ $1,265.00 150,000

 

Gallonage Charge: (Residential and Non-residential) Per 1,000 gallons used over allowance listed above:
W0
$6.05

Base Facilities Charge Water Group 1 and Water Group 2: (Residential and Non-residential) – No bill will be rendered for less than the minimum charge set forth below:

Monthly Water Base Facility Charge – Water Group 1 (W1) and Water Group 2 (W2)

Meter Size W1 W2
Less than 1” $18.81 $18.81
1″ $42.74 $42.74
1½” $85.48 $85.48
2″ $136.77 $136.77
3″ $273.55 $273.55
4″ $427.42 $427.42
6″ $854.84 $854.84

 

Gallonage Charge: (Residential and Non-residential) Per 1,000 gallons used for all meter sizes by Water Group

UNMETERED ACCOUNTS Unmetered connections shall be charged as set forth below:

Flat Rate (Unmetered) Water Service

W0 W1 W2
Residential $45.00 $45.00 $45.00
Non-residential $104.00 $104.00 $104.00

 

PRIVATE FIRE SERVICE FEES: The monthly fee charged for each private fire service connection and/or private fire hydrant shall be as follows:

Connection Size
1 inch
1½ inch
2 inch
3 inch
4 inch
6 inch

Monthly Minimum Charge
$9.13
$18.26
$29.21
$58.42
$91.29
$182.58

WASTEWATER SERVICE RATE SCHEDULE BY GROUP –
Sewer 0 (SO), Sewer 1 (S1), & Sewer 2 (S2)

METERED ACCOUNTS: Metered connections shall be charged the monthly base facility charge plus the gallonage charge for all gallons used as set forth below:

Base Facility Charge: (Residential and Non-residential) No bill will be rendered for less than the minimum charges set forth below:

Monthly Wastewater Base Facility Charge – Sewer Group 0 (S0)

Meter Size S0 Gallons included in Allowance
Residential any size $48.00 3,000

Gallonage Charge: (Residential) Per 1,000 gallons used over allowance listed above:
S0
$12.47

Non-Residential
Meter Size SO Gallons Included in Allowance
<1” $48.00 3,000
1″ $120.00 7,500
1½” $240.00 15,000
2″ $384.00 24,000
3″ $768.00 48,000
4″ $1,200.00 75,000
6″ $2,400.00 150,000

Gallonage Charge: (Non-residential) Per 1,000 gallons used over allowance listed above:
S0
$14.96

Monthly Wastewater Base Facility Charge Sewer Group 1 (S1) and Sewer Group 2 (S2)

Meter Size S1 S2
Residential Any Size $33.38 $33.38

 

Non-Residential
<1” $33.38 $33.38
1″ $75.87 $75.87
1½” $151.74 $151.74
2″ $242.78 $242.78
3″ $485.55 $485.55
4″ $758.68 $758.68
6″ $1,517.36 $1,517.36

 

Gallonage Charge: (Residential and Non-residential)

S1 S2
Residential $13.38 $15.74
Non-residential $16.06 $18.89

*Monthly residential usage charges are limited to 6,000 gallons

UNMETERED ACCOUNTS Unmetered connections shall be charged as set forth below:

Flat Rate (Unmetered) Service:

S0 S1 S2
Residential $85.58 $85.58 $85.58
Non-residential $277.01 $277.01 $277.01

 

Finally, the Company has also requested certain changes to its tariff. These changes include: (1) An additional voluntary service connection fee of $750 for a customer receiving both water and wastewater service from the Company for measuring irrigation/outdoor water usage; (2) elimination of sewer volumetric allowances for portable handheld irrigation deduction meters; and (3) changes to grinder pump installation and maintenance, and additional changes discussed in greater detail in the Company’s Schedule 41 attached to the Application.

The details of these and other proposals are set forth in the Company’s Application. Interested persons are encouraged to review the Company’s Application, testimony and supporting exhibits for the details of these proposals.

TAKE NOTICE that the Commission may adopt rates that differ from those appearing in the Company’s Application and supporting documents and may apportion revenues among customer classes and/or design rates in a manner differing from that shown in the Application and supporting documents.

The Commission entered an Order for Notice and Hearing that, among other things, suspends the Company’s proposed rates for the maximum period allowed by law, given the COVID-19 pandemic, and permits the Company to place its proposed rates, charges, and terms and conditions of service into effect on an interim basis, subject to refund, effective January 27, 2021.

The Commission’s Order for Notice and Hearing scheduled a public hearing at 10 a.m. on April 20, 2021, to receive the testimony of public witnesses and the evidence of the Company, any respondents, and the Commission’s Staff. Further details on the hearing will be provided by subsequent Commission Order or Hearing Examiner’s Ruling.

The Commission has taken judicial notice of the ongoing public health emergency related to the spread of the coronavirus, or COVID-19, and the declarations of emergency issued at both the state and federal levels. In accordance therewith, all pleadings, briefs, or other documents required to be served in this matter should be submitted electronically to the extent authorized by 5 VAC 5-20-150, Copies and format, of the Commission’s Rules of Practice and Procedure (“Rules of Practice”). Confidential and Extraordinarily Sensitive information shall not be submitted electronically and should comply with 5 VAC 5-20-170, Confidential information, of the Rules of Practice. For the duration of the COVID-19 emergency, any person seeking to hand deliver and physically file or submit any pleading or other document shall contact the Clerk’s Office Document Control Center at (804) 371-9838 to arrange the delivery.

Pursuant to 5 VAC 5-20-140, Filing and service, of the Commission’s Rules of Practice, the Commission has directed that service on parties and the Commission’s Staff in this matter shall be accomplished by electronic means. Please refer to the Commission’s Order for Notice and Comment for further instructions concerning Confidential or Extraordinarily Sensitive Information.

Interested persons may download unofficial copies of the Application from the Commission’s website: https://scc.virginia.gov/pages/Case-Information. Copies of these documents also may be obtained, at no charge, by submitting a written request to counsel for the Company: John K. Byrum, Jr., Esquire, Woods Rogers PLC, 901 East Byrd Street, Suite 1550, Richmond, Virginia, 23219, jbyrum@woodsrogers.com.

On or before April 1, 2021, any interested person may file written comments on the Application with the Clerk of the State Corporation Commission, do Document Control Center, P.O. Box 2118, Richmond, Virginia 23218-2118, or https://scc.virginia.gov/casecomments/Submit-Public-Comments. Compact discs or any other form of electronic storage medium may not be filed with the comments. All such comments shall refer to Case No. PUR-2020-00106.

Any person or entity may participate as a respondent in this proceeding by filing a notice of participation on or before November 13, 2020. If not filed electronically, an original and fifteen (15) copies of a notice of participation shall be filed with the Clerk of the Commission at the address set forth above. A copy of the notice of participation shall be sent to counsel for Aqua at the address set forth above. Pursuant to Rule 5 VAC 5-20-80, Participation as a respondent, of the Commission’s Rules of Practice, any notice of participation shall set forth: (i) a precise statement of the interest of the respondent; (ii) a statement of the specific action sought to the extent then known; and (iii) the factual and legal basis for the action. Any organization, corporation, or government body participating as a respondent shall be represented by counsel as required by Rule 5 VAC 5-20-30, Counsel, of the Rules of Practice. All filings shall refer to Case No. PUR-2020-00106. For additional information about participation as a respondent, any person or entity should obtain a copy of the Commission’s Order for Notice and Hearing.

On or before February 12, 2021, each respondent may file with the Clerk of the Commission, and serve on the Commission’s Staff, the Company, and all other respondents, any testimony and exhibits by which the respondent expects to establish its case, and each witness’s testimony shall include a summary not to exceed one page. If not filed electronically, an original and fifteen (15) copies of such testimony and exhibits shall be submitted to the Clerk of the Commission at the address above. In all filings, respondents shall comply with the Commission’s Rules of Practice, including 5 VAC 5-20-140, Filing and service, and 5 VAC 5-20-240, Prepared testimony and exhibits. All filings shall refer to Case No. PUR 2020-00106.

All documents filed in paper form with the Office of the Clerk of the Commission in this docket may use both sides of the paper. In all other respects, all filings shall comply fully with the requirements of 5 VAC 5-20-150, Copies and format, of the Commission’s Rules of Practice.

The Company’s Application, the Commission’s Rules of Practice, and the Commission’s Order for Notice and Comment may be viewed at: https://scc.virginia.gov/pages/Case-Information.


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