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Water Rates FAQ

Click on a topic below to view the answers.

Why are you proposing to raise the rates?

The Prince William County Service Authority (Service Authority) is working to mitigate circumstances that have adversely impacted its financial results and projections:

  1. Higher wholesale rates charged by Fairfax Water - Wholesale rates paid to Fairfax Water under the long-term Water Service Agreement with the Service Authority have risen 35% from $1.20 in 2017 to $1.62 in 2019, due to Fairfax Water’s higher operating and capital costs and lower retail and wholesale water sales. This increased the Service Authority’s purchased water costs by approximately $3.6 million in each of the past two years;
  2. Growth in new Service Authority accounts was 30% lower than projected. This resulted in lower availability fee revenues and will result in lower revenues than projected from user rates in the future;
  3. Record rainfall in FY’19 resulted in lower water and sewer revenue and an increase in utility expenses, primarily associated with higher wastewater treatment costs; and,
  4. Consumption per account has declined 16% over the past 10 years, which has negatively affected revenue from volume and peak use charges. The Service Authority expects this trend will continue for the next 10 years.

 

How does the Service Authority set rates?

The Service Authority sets its rates based on the actual cost of service as it does not make a profit. An independent financial consultant, Stantec Consultants, Inc., conducted a rate study for the Service Authority and recommended an adjustment to the rates. The Service Authority’s Board of Directors has authorized a public hearing to consider the proposed rates. The Service Authority’s rate setting philosophy is governed by the following principles:

  • Cost of service: The Service Authority’s rates must generate the revenue required to invest in and operate the system, perform needed repairs and replace its existing infrastructure. Customers pay the cost of providing service to their home or business.
  • Equity in rates: Rates provide equity among all customers, so that the rates for each customer class are fair and reflect the cost of serving that customer class.
  • Simple to understand: Rates should be easy to understand and calculate.
  • Stability: Rates should provide a stable revenue stream from year to year in order to ensure the reliable operation of the system.
  • Growth pays for growth: Revenue requirements for system operation and system expansion are developed separately. The cost of growth (treatment capacity, storage, etc.) is paid by new development while the cost of operations and capital replacements is paid by existing customers.
  • Minimize "rate shock": Rates should be adjusted in modest amounts annually to ease the impact on customers.
  • Maintain Service Authority’s credit ratings: Rates are set to maintain the Service Authority’s strong credit rating. Strong credit ratings represent the Service Authority’s ability to meet its obligations in good times and bad and lower the Service Authority’s cost to borrow funds for large capital projects.

 

Does the Service Authority receive tax money from Prince William County?

No, the Service Authority does not receive any tax dollars from the County.

Why do you set your rates for three years at a time?

Setting rates for three years at a time allows rate increases to be phased in over time and avoid large rate increases in a single year that would burden our customers.

Can we defer rate adjustments?

The deferral of necessary rate adjustments could require the Service Authority to either adopt larger increases in the future or postpone necessary infrastructure replacement projects.

How much more will I pay if rates are increased?

The average residential customer uses 5,530 gallons of water monthly, which is declining each year. The table below shows the average bill under the proposed rates and the change from previously adopted rates for 2020, 2021 and 2022.

To review the proposed rates for 2020, 2021 and 2022, click here.

What are other local jurisdictions charging for water and sewer service?

In comparison with other local jurisdictions, the Service Authority’s proposed rates remain competitive.

Why are some other jurisdictions able to provide water and sewer service at lower rates?

Each water and sewer utility sets its rates based on its own priorities, operating environment and capital needs. Some jurisdictions defer rate increases until it is absolutely necessary and some may delay the replacement of aging infrastructure.

The Service Authority is primarily a retail service provider and purchases most of its water from advanced water treatment plants owned by Fairfax Water. Higher wholesale water rates paid to Fairfax Water is one of the primary reasons for the proposed rate increase. The Authority also participates in the Upper Occoquan Service Authority, which is one of the most advanced and costly water reclamation facilities in the country. Both of these factors impact the Service Authority’s cost of service and its rates.

The Service Authority is careful to ensure its rates are competitive with surrounding jurisdictions while making the investments necessary to provide safe, reliable water service to our customers and returning clean water to the environment.

What is considered an affordable water and sewer bill?

The Environmental Protection Agency’s affordability guideline for water and sewer service is 4.0% of median household income. Based on the average consumption of 5,530 gallons per month for a single family residential customer, the Service Authority’s proposed monthly water and sewer bills for 2020 through 2022 are less than 1.0% of median household income.

How can I share my comments about the proposed changes to rates and fees?

The Service Authority’s Board of Directors will hold a public hearing about the proposed schedule of rates and fees at 7:30 p.m. on Thursday, December 12, 2019, at the Raymond Spittle Building, located at 4 County Complex Court in Woodbridge, Virginia. All interested persons are welcome to attend.

Why does the Service Authority charge Commercial High Demand Charges?

The Service Authority’s water system is designed and constructed to supply drinking water on demand. As the County grows, the Service Authority expands the capacity of its water system to meet the needs of additional customers. New customers pay an Availability Fee at the time of connection based on the cost of expanding the system to meet those needs. When commercial customers use more than their allocated water capacity, this reduces available capacity for the Service Authority’s other customers. To reduce the impact of some commercial customers placing high demands on the water system, the Service Authority assesses Commercial High Demand Charges to recover the cost of providing the additional water system capacity.

Why are High Demand Charges in place year round?

Commercial High Demand Charges are in place year round as commercial customers’ excess use is not limited to the residential peak season (May through October).

Why are some commercial customers exempt from High Demand I Charges?

Commercial customers with water-only or sub-metered service are subject to High Demand I and II. Commercial customers with both water and sewer service are only subject to High Demand II. This ensures equity between different types of commercial accounts and between residential and commercial customers.

Why did Commercial High Demand Charges go up?

Commercial High Demand Charges are based on the cost of capacity, the same as the Residential Peak Use Charges. In fairness to all our customers, these charges should be the same. Initially, the Commercial High Demand Charges were set lower than Residential Peak Use Charges to allow commercial customers to budget for the increased cost. To ensure our rates are equitable for all customers, the Service Authority has been gradually reducing the difference between Commercial High Demand Charges and Residential Peak Use Charges. In January 2021, this transition will be complete and the two charges will be the same.

Where can I get more information about the rates and fees?

Additional details and answers to questions can be provided by the Service Authority at 4 County Complex Court, Woodbridge, VA 22192, Monday through Friday, 8:30 a.m. – 5 p.m., telephone (703) 335-7910 or email finance@pwcsa.org.

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