Purcellville Council Continues Utility Privatization Talks

Representatives of Aqua Virginia were at the Purcellville Town Council meeting Tuesday night to make a formal pitch for the company’s proposal to purchase the town’s water and sewer systems, even though the council last month voted to deny the company’s unsolicited bid to do so.

Aqua Virginia President John Aulbach, Director of Corporate Development Clifton Parker and Essential Utilities Vice President of Corporate Development John Andrews told council members the privatization of the town’s utility systems could benefit the town in six ways—by bringing trusted utility service, hiring all of the town’s utility employees, eliminating risks the town might incur, reducing town debt, allowing for the town to focus on other initiatives, and protecting customers by having rates regulated by the State Corporation Commission.

Aqua Virginia serves 80,000 people through 26,000 water connections and 7,000 wastewater connections in 37 Virginia counties. It is a subsidiary of Aqua America—a publicly traded water and wastewater utility that serves more than 3 million people nationwide. Since its merger with Peoples Gas in March, Aqua America has been known as Essential Utilities. It serves seven states with water, two with gas and one with both.

The Town Council on July 14 voted todirect the staff to rejectAqua Virginia’s unsolicited proposal to purchase the town’s water and sewer systemsand to continue to “conduct further due diligence on the merits of the concept,” according to the motion.

On Tuesday, Aqua representatives were in town presenting the council with details anyway.

Parker said the pockets of water and sewer customers wouldn’t be heavily affected because Aqua’s proposed rates would need to be approved by the Virginia State Corporation Commission first. Parker said it was evident that Aqua would not be “jacking rates up” because the company continues to grow.

He referenced the 4.1-percent average annual growth rate of utility rates across most Virginia localities compared with Aqua’s 0.6-percent average annual growth rate.

“The rates are not going to increase as high as you’re currently looking at doing with them” Aulbach said.

According to recommendations by town consultant Stantec last November, the town should increase rates by 8.6 percent in Fiscal Years 2021 and 2022, 8.61 percent in FY23, 8.62 percent in FY24; and 8.63 percent in FY25. By FY25, the average utility customer who uses 8,000 gallons of water every two months would be spending $112.16 more on the bills they get every other month than they are now.

The town is looking at ways to bolster its utility systems, since itswater fund shrunk by 39 percent and its sewer fund shrunk by 16 percent in Fiscal Year 2020. Those declines are results of anabsence of revenue from new water and sewer connectionsand the need to pay tens of millions of dollars on utility projects andsewer debt.

On June 9, the Town Counciladopted a Fiscal Year 2021 budget accounting solely for the first quarterthat excluded utility rate hikes.

When Councilman Stanley Milan asked how Aqua’s purchase of the town’s utility systems would reduce the town’s debt, Aulbach said money paid to the town from the sale could pay some of that off.

Councilman Ted Greenly also asked whether Aqua could—or ever would—truck water from Purcellville to another town in need during a drought. Aulbach said the company could take water for the town in a situation like that, but that it could also work the other way around.

Aqua is expected to continue working through additional details with the town staff and council.

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