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Water Rates FAQ

Click on a topic below to view the answers.

Why are you raising the rates?

The Service Authority’s goal is to set fair and equitable rates and fees while doing its part to provide clean safe drinking water to its customers and protect the environment. A key element of providing clean drinking water and protecting the environment is ensuring that the Service Authority’s infrastructure is maintained and in good working condition. This requires a significant capital investment every year. The Service Authority periodically recommends changes to rates to ensure we invest in our system in order to properly maintain our infrastructure, meet environmental regulations, and continue to deliver the quality and reliability our customers expect from us. In addition, the Service Authority’s costs continue to rise in the current inflationary environment.

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 homes 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 phase increases in gradually 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 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 does the Service Authority set 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 larger rate increases in a single year that can burden customers.

Can rate adjustments be deferred?

The deferral of necessary rate adjustments could require the Service Authority to postpone necessary infrastructure replacement projects. Additionally, keeping rates artificially low results in higher rate increases in the future when the Service Authority is required to catch up with deferred infrastructure replacement.

How much more will I pay if rates are increased?

A typical residential monthly water and sewer bill using 5,000 gallons will increase by $2.45 in April 2023, $2.45 in 2024, and $2.65 in 2025.

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

In comparison with other local jurisdictions, the Service Authority’s proposed rates in fiscal year 2023 remain competitive.

Why do rates vary by jurisdiction?

Each water and sewer utility sets its rates based on its own priorities, operating environment, and capital needs. Decisions about the timing of maintenance and infrastructure replacement are based on the utility’s system needs, customer requirements, and resources. The Service Authority is careful to ensure its rates are competitive with surrounding jurisdictions while making the investments necessary to provide clean safe drinking water to its customers and protect the environment. Through these efforts, the Service Authority’s rates remain among the lowest in the region.

What is considered an affordable water and sewer bill?

The Service Authority’s average monthly bill is considered affordable or low-burden using several affordability metrics.

The Environmental Protection Agency (EPA) recommends multiple affordability measures and guidelines for water and sewer service. The guidance provided by the EPA in relation to median household income (MHI) states that customers’ bills under 4.0% of MHI are considered affordable. To expand upon the view of affordability for households with lower incomes, the EPA developed the Lowest Quintile Residential Indicator (LQRI) and the Hours Worked (HM) metrics. The LQRI approach evaluates a customer bill at the lowest quintile of income instead of median income, with a threshold of under 4% considered affordable. The Hours Worked approach evaluates the number of hours worked at the prevailing minimum wage to pay the typical residential water and sewer bill, with the threshold of under 8 hours worked deemed affordable.

Based on the Service Authority’s typical household consumption of 5,000 gallons per month, the Service Authority’s proposed monthly water and sewer bills for fiscal years 2023 through 2025 are less than 1.0% of median household income, under 2% for LQRI, and under 7 hours worked.

The proposed rates continue to reflect the Service Authority’s average monthly bill as affordable and continue to place the Service Authority’s average bill amongst the lowest in the region

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

The Service Authority Board of Directors will hold a public hearing about the proposed schedule of rates and fees at 6:45 p.m. on Thursday, February 9, 2023, at the Raymond Spittle Building, located at 4 County Complex Court in Woodbridge, Virginia. All interested persons are welcome to attend.

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