Virginia Headlines
On Jan. 26, 2012, AOBA filed a brief contesting the both the Washington Gas request for a $28 million increase in the Company’s Virginia natural gas rates and a $20 million increase included in a settlement proposed by the Company and Commission Staff, among others. AOBA’s challenge asserts that the requested $28 million rate increase and the proposed $20 million settlement are not in the public interest, result in inappropriate large increases for ratepayers, and are inconsistent with the evidence in the case. Based upon AOBA’s assessment, Washington Gas should receive an increase of not greater than $4.7 million (i.e., less than 25% of the amount of the increase proposed in the stipulated settlement). AOBA’s position is that the proposed Settlement substantially overstates the amount of rate relief for Washington Gas that is reasonable and appropriate based on the record on the case. In addition, AOBA argues that the Settlement either does not address or inadequately addresses a number of issues that are of importance to ratepayers in this proceeding.
AOBA was the only party to challenge the stipulated settlement and the only party that argued for full evidentiary hearings to evaluate the Company’s requested rate increase and the proposed settlement. Yet, AOBA submits that a number of elements of the Company’s rate request and of the proposed settlement warrant further review by the State Corporation Commission (“SCC”).
AOBA particularly focuses on the very high percentage of Common Equity for Washington Gas that is included in Company’s capital structure, and the failure of the Company, the Staff, and other parties to properly adjust either the Company’s authorized return on equity or the percentage of Common Equity in the capital structure that is used for ratemaking purposes. Moreover, the ROE included in the stipulated settlement exceeds the upper bound of the range of ROE results supported by the Commission Staff as well as the ROE’s recommended for Washington Gas by witnesses for AOBA and Fairfax County.
Additionally, AOBA argues the stipulated settlement:
- Allows for the termination of the Company’s Performance Based Ratemaking (“PBR”), that was adopted the Company’s last base rate case to provide a means for ratepayers to participate in anticipated cost savings from the Company’s outsourcing of major elements of its Administrative and General and Customer Service functions, without providing any alternative means of flowing any portion of the benefits of such cost savings to ratepayers;
- Provides for inclusion in base rates of substantial hexane related costs for which the Company has not provided reasonable or appropriate cost justification;
- Permits Washington Gas recovery through base rates of significant Executive Incentive Compensation costs that should not be included in rates and are more appropriately the responsibility of the Company’s shareholders; and
- Allows for implementation of a new credit card bill payment program which will only serve to significantly increase the Company’s payment processing costs over time.
By law, the Company’s requested $28 million rate increase was implemented on Oct. 1, 2011, subject to a refund with interest to ratepayers should the Commission determine that the full rate increase was not justified. AOBA’s arguments, if successful, will not only lead to lower rates for Washington Gas on a going-forward basis, but will also lead to refunds of much of the increase in charges that Washington Gas is presently collecting from its customers on a subject-to-refund basis. AOBA anticipates a decision from the Commission in the spring of 2012.
Fairfax City Mayor Robert Lederer announced recently that he will not seek reelection and will step down in June after ten years in office. Prior to his election in 2002, Lederer served five terms on the City Council. AOBA recently engaged in productive conversations with Mayor Lederer regarding a longstanding dispute between the rental housing industry and City staff over the City’s rental inspection program.
AOBA joined with 25 other major business and community organizations in Northern Virginia this month to unveil a joint policy position on transportation. The resolution (which subsequently received the endorsement of the Fairfax County Board of Supervisors as well) calls for Virginia’s Governor and members of both parties in the state legislature to work together and do whatever is necessary in the 2012 General Assembly to build on progress achieved in the 2011 session and secure significant, new, dedicated, reliable transportation revenues drawing on a package of balanced and equitable funding sources. Such action, the coalition urges, is necessary to erase Virginia’s well-documented transportation deficit, which threatens Virginia’s long-term prosperity.
The Virginia Housing Commission will take action in December on proposed legislation to address an issue that has presented property owners with troubles for years. Current Virginia law allows a private or municipal water authority to place a lien on the owner of a property to collect on delinquent utility accounts which go unpaid by a tenant. Coincident with the ongoing recession, Virginia has seen a sharp increase in the number of such liens placed on properties, sometimes without the knowledge of the property owner. In response, the real estate industry has negotiated a compromise proposal which would significantly limit the exercise of liens, placing the onus for such water and utility bills back on the tenant who had contracted for those services. The bill only allows water authorities to enter into contracts with tenants under written authorization from the building owner. In addition, it mandates that the utility must obtain a security deposit from the tenant in an amount sufficient to cover up to five months of water and sewer bills, to be applied to delinquent payments. The bill would also require notice to the building owner prior to the placement of any lien.
With one race still in dispute, it appears that Republicans have gained two seats in the Virginia Senate to eradicate the Democrats’ control over the Chamber. Pending a recount, divided control over the Senate appears likely with Lieutenant Gov. Bill Bolling, a Republican, poised to cast the deciding vote on controversial issues. Divided control may also mean a shakeup in Committee leadership. This could have ill effects for Northern Virginia, where senior Democrats hold several key Committee chair positions. Republicans also gained seats in the House of Delegates, pushing their majority to 66 out of 100 seats. This will likely also have implications for Committee composition as Democrats will likely receive fewer Committee assignments from the Speaker of the House to accommodate newly elected Republicans. Questions about how these elections result may impact our industry? Contact Brian Gordon, bgordon@aoba-metro.org
The Virginia Department of Housing and Community Development's Jack A. Proctor Virginia Building Code Academy has announced a new training program for design professionals, builders, building owners, and code enforcement personnel. This one-day program on Jan. 27, 2012 in Fairfax, VA will provide an overview of energy concepts, energy conservation and an introduction to the 2009 Virginia Energy Conservation Code as well as the relative residential and commercial building codes. Participants will gain knowledge of the concepts of energy and the 2009 Virginia Energy Conservation Code. In addition, the Virginia Weatherization Training Center will provide demonstrations and answer questions regarding energy concepts and conservation. Participants will receive a number of reference materials useful in understanding and applying the energy codes in the design and building process. Click here for more information or to register, or contact the Virginia Building Code Academy for more information at (804) 371-7180.
The Arlington County Board is considering requesting legislation in the 2012 session of the Virginia General Assembly to grant authority to local governments to force property owners to provide relocation assistance to tenants when properties undergo redevelopment. Under existing code, 120 days notice is required when tenants are to be displaced due to redevelopment or rehabilitation of a building. The County currently has a set of “voluntary” guidelines; however, the County lacks leverage when a property is redeveloped by-right under its existing zoning designation.
Echoing the sentiments of utility customers across the Commonwealth, House of Delegates Minority Leader Delegate Ward Armstrong (D-Henry) has called for the General Assembly to freeze electric utility rates until meaningful changes are made to Virginia’s regulatory scheme. Armstrong has vowed to introduce legislation in the 2012 session of the General Assembly to both freeze electric utility rates and revise state regulations governing the way in which the State Corporation Commission oversees utilities.
Delegate Glenn Oder (R-Newport News) was recently appointed as the next Executive Director of the Fort Monroe Authority. In this position he will lead the transition of Fort Monroe, in Newport News, VA, from federal to state ownership and from military base to historic asset and tourism destination. While Oder is an excellent selection for this position, his presence will be sorely missed in the VA General Assembly, from which he retires effective Aug. 31. AOBA has worked closely with Delegate Oder during his nine years in the House of Delegates, where he served as a member of key House Committees on Transportation, General Laws and Counties, Cities & Towns. Delegate Oder brought to these posts a strong foundation and understanding of housing and development issues. This basis of understanding also served him well as a member of the Virginia Housing Commission where he championed legislation supported by AOBA over the last several legislative sessions. Delegate Oder was also an outspoken advocate for transportation infrastructure funding, and has been recognized on multiple occasions as an AOBA Leadership Award recipient.
Local governments in Northern Virginia have been consistently recognized among the nation’s most fiscally responsible. In fact, the City of Alexandria, Arlington County, the City of Fairfax, Fairfax County, the Town of Herndon, Loudoun County, Prince William County and the Town of Vienna all enjoy AAA ratings (the highest possible,) allowing them to issue bonds and borrow at a significantly reduced rate. However, it appears that the federal government’s recent squabble over the debt ceiling has placed this status in some peril. Several Northern Virginia jurisdictions were notified last week that they were being placed on a review list for a potential downgrade in credit rating by Moody’s Investors Service. Representatives from Moody’s indicated concerns over the federal government’s continued solvency and the economic dependence of Northern Virginia localities on federal spending. Chief elected officials from the above-mentioned localities issued a joint statement in response reassuring investors that nothing has changed in terms of local financial and debt management practices and suggesting that their continued strong fiscal management and low overall debt burdens will bring stability to the region.
Is your company fully aware of the air permitting requirements for diesel generators and diesel generator aggregations in Virginia? If not, you could be subjected to strict enforcement action and/or fines. AOBA and the Virginia Department of Environmental Quality have teamed up to provide a briefing for interested members regarding the obligations of commercial property owners to meet air quality requirements. The program will cover frequently asked questions and critical responsibilities about which all commercial property managers in Virginia should be aware. The briefing will be held onJune 20, from 11:30 am to 1:00 pm, at the offices of Boston Properties, located at 11951 Freedom Drive, Reston, VA. Lunch will be provided. For more information or to RSVP, please contact Uatausha Taylor at (202) 296-3390 or by email at utaylor@aoba-metro.org.
Manassas State Senator Chuck Colgan (D) has announced that he will seek an additional term of office, ending months of speculation that he may retire. Sen. Colgan is not only the longest-serving sitting member General Assembly, but also chairs the powerful Senate Finance Committee - a position that he leveraged over the years to bring home the bacon for Northern Virginia for many years. Colgan's decision to seek reelection not only benefits Northern Virginia, but bolsters the prospects for the Senate Democrats to maintain their slim majority control of the State Senate. AOBA has worked closely with Sen. Colgan over the years, including working on homestead exemption legislation several years ago.
