Aqua rate increase unjust, too high, report finds

By Heather Michon

Lake Monticello Owners Association (LMOA) has written a formal response to Aqua Virginia’s proposed 29.49 percent rate increase now pending before the Virginia State Corporation Commission (SCC).

In a 27-page report posted on the LMOA member website, the LMOA Community Development Committee (CDC) makes the argument that not only has Aqua failed to make the case for the rate increase, it hasn’t even proven that “its services and facilities are reasonably adequate” for its 4,600 Lake Monticello households.

Odor, taste, pressure, spills

CDC volunteers looked through 580 comments registered with the SCC by Lake Monticello through mid-January. They found that complaints about Aqua’s service fell into four main categories: odor, water quality, low water pressure, and wastewater spills into the Lake.

Often, Aqua’s response to complaints has fallen short.

After years of complaints about persistent odors from the sewage plant drifting into the community, Aqua finally commissioned an air quality study in 2023. 

The CDC said the testing was conducted over just 10 days around Thanksgiving “and did not include the wastewater treatment plant which is a significant source of foul odors.” 

The study didn’t find any problems, and so didn’t offer any solutions. 

In many ways, it appeared to the CDC that Aqua Virginia lacks “comprehensive knowledge of its services and infrastructure” in and around Lake Monticello.

They cited a December 2023 letter from Aqua claiming that the LMOA was in violation of service rules by letting boats dump their sewer tanks at the Marina. 

LMOA pointed out that “no boats on Lake Monticello have toilets that require dumping,” the Marina has no dumping site, and more importantly the Marina has a septic system and is not even connected to the Aqua wastewater system – something Aqua arguably should know.

The CDC said they had also learned that Aqua had cut service to the pool and clubhouse at The Villages at Nahor, a senior living community on Rt. 53, “after discovering it had never installed a water meter.” The pool and clubhouse have been in operation and connected to Aqua’s system for the past 15 years.

SCC should scrutinize data

In their analysis, the CDC found that Aqua Virginia owns 191 water systems and 9 sewage treatment systems statewide. Most of these systems are so small that the customer base can barely support day-to-day functions, much less repairs and upgrades.

As a result, Aqua uses larger water systems like Lake Monticello to fund operations at smaller units.

“This means that the Lake Monticello customers are having to pay rates higher than necessary to support the operations and infrastructure of the Lake Monticello water and wastewater systems,” they report, a practice that “is unjustly discriminatory to Lake Monticello residents.”

With a rate increase of 21.08 percent for water usage and 33.88 percent for wastewater usage, the bill for 3,000 gallons of water per month will increase bills by an average of $32.08 per month.

This will be a big financial hit for the eight percent of Lake residents who live below the poverty line and the 10.5 percent who rely on government assistance. 

“If Aqua 33 Virginia’s requested increase is approved, Lake Monticello customers whose fixed income is limited to Social Security retirement benefits will need 65 percent of their increase for 2024 just to pay for the increase in their 3,000-gallon bill from Aqua Virginia.”

Aqua is allowed to use financial data from whatever “base year” they choose to support their request for a rate increase. 

The report notes that Aqua used the period from April 1, 2022 to March 31, 2023 – the period of highest inflation rates in the United States since 1981. 

Inflation rates have now started to drop.

At a minimum, the LMOA believes “the SCC staff need to scrutinize all of Aqua Virginia’s financial data for its test year and determine their accuracy. In addition, the SCC should have Aqua Virginia make adjustments based on inflation and corrected capital costs.”

Finally, “the LMOA Board asks the SCC to deny Aqua Virginia’s proposed rate increase, including any rate of return on its cost of common equity because this appears to be a case where its requested rate of return – or any rate of return – is just too high.”

Next steps

The SCC will hold a hearing on the rate case in late April.

Along with the LMOA’s formal response to the case, Fluvanna and other county governments in the Aqua service area are also likely to submit testimony against the increase. The Board of Supervisors approved a notice of participation in the case at their Jan. 17 meeting.

Aqua customers in Fluvanna County are encouraged to share their thoughts on the rate increase with the SCC via the website:

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