By Adrianna Dimperio and Rebecca Naurath, Draper Aden Associates*
Understanding water and wastewater rate trends is crucial for public utilities and municipalities, including counties, across Virginia. The Commonwealth boasts more than 250 public providers of water and wastewater services that are active in every size and type of community. This variety can make it difficult for providers to effectively analyze statewide trends and set benchmarks when considering their rates. Are your water and wastewater rates in line with similar communities? Perhaps those rates are lower than average, meaning that your community could be losing revenue. Similarly, when municipalities and water and wastewater providers consider rate changes it’s vital that they provide context for proposed rates.
That’s why Draper Aden Associates has produced the Virginia Water and Wastewater Rate report for more than three decades. These reports are essential resources for public utilities and are eagerly anticipated. The 2021 edition of the report was released in November 2021.
Similar to previous years, the firm collaborated with the Virginia Association of Counties to conduct the water and wastewater rate survey.
The two most significant findings from the 2021 survey are related to rate changes. First, the average water rate across the Commonwealth increased by 3.3 percent in 2021 and the average sewer rate increased by 4.3 percent. The water rate increase was slightly lower than previous years and the wastewater rate was slightly higher. Since 2011, water rates have increased by approximately
3.5 percent per year and wastewater rates have increased by approximately 3.9 percent per year. These increases occurred across a control group of representative utilities that allows the report to extrapolate trends across the state.
Second, 48 percent of respondents reported a water rate increase in 2021 while 47 percent of respondents increased sewer rates in 2021. Thus, approximately half of all providers raised rates.
The most significant opportunity on the horizon for public utilities is funding related to the American Rescue Plan Act (APRA). These funds offer potential transformational resources for public utilities. For example, this money would allow public utilities to invest in water and wastewater infrastructure projects. Additionally, these funds could offset the need for higher rates and capital recovery charges in 2022. Creating a strategy to leverage these funds will be critical for public utilities. A recent ARPA Q&A for utilities offers helpful resources.
The 33rd Annual Virginia Water and Wastewater Rate Report was produced by Draper Aden Associates in collaboration with leading trade associations that support municipalities and utilities, including the Virginia Association of Counties. The 2021 Virginia Water and Wastewater Report and previous reports are available for download on the Draper Aden website.
*Adrianna Dimperio is the Utilities Division Manager and Rebecca Naurath is a Project Engineer with Draper Aden Associates, an engineering, surveying, and environmental services firm in the Mid-Atlantic. They are the primary authors of the annual Virginia Water and Wastewater Rate Report. Adrianna can be contacted at adimperio@daa.com and Rebecca can be contacted at rnaurath@daa.com.