Customers should be prepared for rate hikes in May

Nine months after the SCC approved rate increases for Virginia American Water, the company filed another application and is preparing to raise water and wastewater rates again and revise tariffs.

Rate Increase Approved

Virginia American Water applied for a rate increase on November 1, 2023 claiming the request was driven by over $110 million in investments in treatment systems and distribution upgrades.

On May 1, 2024, while the application was still under consideration, the company implemented interim rates.

The SCC issued an order on February 24, 2025 approving rates that represented an increase of about $14.6 million annually. But that was less than the company requested and the rate increases were lower than the interim rates so Virginia American Water had to issue refunds.

However, customers have still been paying higher rates since May 2024.

New Application (Nov. 2025)

On November 3, 2025, Virginia American Water filed a new rate increase application, this time seeking a $21.9 million annual sales hike—a 27% increase over current revenues.

The company stated that, if approved, the average residential customer using 4,000 gallons per month would pay approximately $11 more per month each for water and wastewater services.

Virginia American Water indicated that the primary driver of the proposed increase is ongoing investment in its facilities, with about $115 million being invested between 2024 and April 30, 2027. The company also noted that its operating and maintenance expenses have been increasing roughly 2% per year since 2015, while residential water usage has continually declined.

Four Proposed Tariff Changes

In addition to the proposed rate hikes, Virginia American Water is seeking several changes to its tariffs, which affect fees, connection policies, and other service terms.”

• Addition of a capacity charge for wastewater due to connection issues the company says it is facing and expects to continue facing.

• Change to terms and conditions clarifying customer responsibilities for private fire service connections, like hydrants or fire lines.

• Change to terms and conditions regarding requirements for service to new developments or customers.

• Increase of the reconnection fee from $25 to $30 for service disconnected due to nonpayment or rule violations. Virginia American Water also wants bake third-party electronic payment fees into the cost of service. The company notes that doing so would keep the customers who use those services from having to pay the fees directly.

May Rate Hikes

The SCC suspended the proposed rates for 180 days, the maximum allowed under Virginia law.

As with the previous application, Virginia American Water can impose interim rates while the SCC deliberates and has announced plans to do so at the beginning of May. On

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March 5, 2026, the company provided the SCC a surety bond for $21.9 million backing its ability to issue refunds again, if necessary.

Public Input

The public has opportunity to weigh in. Comments can be submitted by mail or electronically on the SCC’s website until June 3. There’s also an option to visit the website or call to register to sign up to testify by telephone starting June 10.