The Virginia-American Water Company, a privately owned, for-profit company regulated by the state, has proposed a 16-percent increase in water utility prices for the district that includes Alexandria.

The increase would cost an Alexandria family of two an average of $40 more per year while the city governments water bill would increase by $92,000, according to a City Council memo. 

Capital investments and questionable water usage statistics drive the increase, as does the companys request for a higher rate of return on common equity, City Manager Jim Hartmann wrote in the memo.

City staff has found sufficient evidence for the increase, but not one as large as 16 percent. The City Council formally decided to provide such comments in a report to the water company last 
Tuesday.

Two years ago, the Virginia-American Water Company applied for a 25-percent increase for Alexandria customers.

This is a heck of a way to run a water company or any company, Councilwoman Del Pepper said sarcastically.

The water company will have to refund customers with interest should it discover that a lower rate was appropriate, according to rules set by the State Corporation Commission. The increase will go into effect August 13.