Northern Virginia's water war heats up again as some see anticompetitive bill
A new front in Northern Virginia's "water war" between Fairfax Water and the City of Falls Church appears to have opened, with a proposal to add two words to existing law governing water utilities.
And some believe the spoils lie in Tysons Corner and other places ripe for redevelopment.
With less than a week before the scheduled conclusion of the annual legislative session, members of the business community, lawmakers and business groups appeared blindsided by the potentially significant impact of SB1160, with some believing it could undercut competition for water service, thereby driving up water utility rates.
"We're concerned it could allow someone to corner the market," said Barbara Gordon, a spokeswoman for the City of Falls Church. From Falls Church's perspective, that someone would be none other than its longtime competitor, Fairfax Water.
The two water suppliers fought a bruising lawsuit that ended in victory for Fairfax Water--and a finding that Falls Church had been unlawfully diverting millions of dollars to city coffers from Fairfax County ratepayers.
Comes now the bill that would amend a section of the law allowing water utilities to compel developers to hook up to their water and sewer lines -- so long as that arrangement is also endorsed by local authorities, such as the Fairfax County Board of Supervisors.
The bill would only add two words --- or after-- to a rather technically worded passage of law.* [See below] The upshot seems to be that it would give the utility more time in which to try to mandate that developers hook up new construction to their service.
But the bill set off a kerfuffle after members of the business community and some Northern Virginia lawmakers heard that the bill could give an unfair advantage to Fairfax Water in the competition to serve new development in Tysons Corner and Merrifield.
"The suspicion is, it's directed at all the new development in Tysons and to corner the market on that business," said Del. Scott A. Surovell (D-Fairfax).
Even its sponsor, Sen. Frederick M. Quayle (R-Suffolk) seemed taken aback by the fuss and uncertain of its consequences. "I'm not sure how much I can explain because it was brought to me," he said.
Quayle said he offered the bill at the behest of Whittington W. Clement, an attorney with Hunton & Williams whose clients include Fairfax Water. But Quayle said he couldn't remember whether Fairfax Water or Falls Church's water utility had expressed an interest in the measure, along with other water authorities in the Hampton Roads area.
Stuart Raphael, an attorney at Hunton & Willliams who also represents Fairfax Water, dismissed concerns that the bill would be anticompetitive.
"Frankly, it's surprising there's been such a hullabaloo," Raphael said late Tuesday. He said the bill was requested by the Virginia Water and Waste Authority Association simply to clarify the time frame in which an authority had to act to exercise its power to compel developers to hook up to its water supply.
With a strict reading of the word "upon," a judge could conclude that a water authority would have to act immediately to draw up resolutions mandating the use of its service and obtain the local government's approval, Raphael said. By adding the words "or after," a judge could construe the law to mean that water authorities have an indefinite period of time in which to exercise its powers. If anything, forcing utilities to exercise their power sooner than later would shut off more competition than allowing them more time, Raphael said.
Raphael also emphasized that local governments would have to approve such a mandate. "It ultimately comes down to what the Board of Supervisors wants," he said.
The bill, which flew through the Senate, is scheduled to be heard Wednesday.
*Right now, the law reads:
"Upon the acquisition or construction of any water system or sewer system under the provisions of this chapter, the owner, tenant or occupant of each lot or parcel of land...shall, if so required by the rules and regulations or a resolution of the authority, with the concurrence of the locality in which the land is located, connect the building with the water main or sanitary sewer. . ."
Quayle's bill would add "or after":
"Upon or after the acquisition or construction of any water system or sewer system under the provisions of this chapter, the owner, tenant or occupant of each lot or parcel of land...shall, if so required by the rules and regulations or a resolution of the authority, with the concurrence of the locality in which the land is located, connect the building with the water main or sanitary sewer. . ."
| February 23, 2011; 8:00 AM ET
Categories: Fairfax County, Fairfax County Board of Supervisors, General Assembly 2011
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