Water Rates Increased in Most of the Region

Recently, Fairfax Water announced its intention to raise their water rates next spring. There will be a public hearing on Thursday, December 12, 2019, on the proposed rate increase held at Fairfax Water’s main office at 8570 Executive Park Avenue in Fairfax. This rate increase is part of their ongoing program to ensure that the water infrastructure in Fairfax County is maintained. Proposed revisions include a change in the commodity charge from $3.07 to $3.20 per 1,000 gallons, effective on April 1, 2020.

As they do every time they propose to raise water rates, Fairfax Water performed a comparison of the water costs throughout the Washington Metropolitan region. This comparison is based on rates as of July 1, 2018 and on 18,000 gallons of residential water use for an established account over a three month period. I also compared these rates to the comparison that was done in 2017 and 2018.

Most water and sewer utilities in our region are a separate, government enterprise fund established to be self-supporting. That means that the majority of their revenue is from charges for services provided to customers, including account charges, new connection charges and the charges for water and sewage by the gallon. These charges, both variable and fixed, are to cover the costs of renewing the buried pipes and distribution networks as well as the costs to operate and maintain the treatment plants. Towns like Manassas Park use water revenue to service other debt. 

As you can see above the City of Bowie had the largest percentage increase in their water rates over the past two years, increasing 41% . The next largest was Virginia American Water (Alexandria) which increased rates 38%  over the past two years and Washington Suburban Sanitary Commission (WSSC) which increased rates 32% over the past two years. The highest water rates were City of Manassas Park still at $205.50 (they had no increases in the past two years), the Town of Leesburg (outside town limits) at $185.47 (18% increase), Virginia American Water (Prince William) at $150.25 (13% increase), followed by WSSC at $146.16 (32% increase).  Clearly, water rates are most part increasing faster than inflation and Fairfax Water provides the data because it still makes them look good.

The bulk of revenue has historically been from gallons of water sold.  However, water use in the region peaked about 30 years ago so, there has been more reliance on fixed fees and increasing rates to increase revenue.  In the past to keep water prices low some water distribution companies have cut their investments in maintaining their distribution systems (water treatment plants had to meet U.S.EPA standards), repairing piping after it failed instead of maintaining a planned repair schedule that Fairfax water has maintained. The Fairfax system is still relatively young and still growing. 

DC Water is a small system and has some of the oldest pipes in the region; some that still contain lead. Yet, their capital program was for many years designed to replace the distribution piping over a 300 year cycle. Pipes and valves are designed to last about 80 years. Pretty much DC water was planning for the failure of the system. In the past decade or so the replacement cycle has been shortened to 100 years, but that is too slow a pace for the aging system and unless additional investments are made. Last January over an 11 day period there were more than 150 broken water mains and service lines..  DC Water has reduced rates over the past two years.

WSSC is 101 years old and about a quarter of their 5,600 miles of water mains in Montgomery and Prince George’s counties are over 50 years old. The WSSC is currently replacing 55 miles of water pipe each year making approximately $1.5 billion in capital investments and have an operation and maintenance budget of approximately $1.3 billion per year and a debt schedule to meet. They are still working hard to catch up. Last January alone there were 803 water main breaks.