WVWA proposes $50.6m FY27 capital budget and new high-volume rate tier

WVWA proposes $50.6m FY27 capital budget and new high-volume rate tierThe Western Virginia Water Authority is advancing a $22.7 million summer bond issuance to fund shovel-ready water distribution projects, alongside a 3.2% residential rate hike and a potential demand charge for large industrial users.

The FY27 capital budget totals $50.6 million, with $34.4 million allocated to water and $16.2 million to wastewater projects.

WVWA plans a $22.7 million bond issuance in summer 2026 to fund shovel-ready water distribution improvements and avoid arbitrage issues.

Proposed rate increases would add $1.20 to volume charges, raising average residential combined water and sewer bills by 3.2%.

The utility is evaluating a Tier 4 demand charge for high-volume users, following public concerns over a proposed data center slated to use up to 8 MGD.

Long-term CIP planning includes a $10 million allocation in FY29 to begin replacing the authority's aging AMI smart meter network.

The Western Virginia Water Authority (WVWA) is advancing a $50.6 million capital budget for fiscal year 2027, backed by a planned $22.7 million summer bond issuance and a proposed 3.2% combined residential rate increase. During the authority's April 16 board meeting, staff outlined the FY27 capital improvement plan, which allocates $34.4 million to water projects and $16.2 million to wastewater. To finance the water distribution upgrades, WVWA plans to submit an application to the Virginia Resources Authority (VRA) by May 1, with the summer pool bond expected to close in August 2026. To avoid arbitrage issues flagged in previous audits, staff emphasized that the funded water line replacements and extensions are already designed and "shovel-ready." The authority intends to bid the projects in the summer and issue notices to proceed by September 1, immediately after funding becomes available. The capital plan is supported by proposed rate increases that would add $1.20 to the volume charge for both water and sewer. For an average residential customer using 4,000 gallons, the combined monthly bill will rise from $74.15 to $76.55, a 3.2% increase. Alongside the standard rate adjustments, staff confirmed they are working with rate consultant Raftelis to evaluate a "Tier 4" rate for high-volume commercial and industrial customers. The proposed structure would combine a volume-based charge with a demand charge associated with unused capital capacity. The discussion follows public pushback regarding a planned Google data center in Botetourt County. During the meeting's public comment period, a citizen noted the facility could require up to 8 million gallons per day (MGD) and questioned the impact on the system amid current Stage 2 drought conditions in the region. Looking ahead, the authority's 10-year capital plan anticipates significant future expenditures. Staff highlighted a $10 million allocation slated for FY29 to begin replacing the utility's Advanced Metering Infrastructure (AMI). The current smart meters are approaching 15 years old and are nearing the end of their 20-year lifespans as batteries begin to fail. On the wastewater side, a recently completed sewer masterplan identified capacity constraints along the Roanoke River and Tinker Creek interceptors. While near-term wastewater debt remains lower than water debt, officials warned that significant debt issuances—potentially in $30 million tranches—will be required in the coming years to address inflow and infiltration (I&I) and capacity limits on the aging, large-diameter interceptor pipes.