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Posted at 3:50 PM ET, 02/24/2011

UPDATED:Virginia House passes bill that eases NOVA's anticompetitive concerns about water utilities

By Fredrick Kunkle

The House of Delegates on Thursday approved a reworked water utilities bill after allaying concerns among some Northern Virginian lawmakers that the measure could limit developers' choice of water suppliers in Tysons Corner and other fast-growing areas.

The bill -- which concerns the power of water utilities to mandate the use of their service so long as local governments agree -- had threatened to reignite the long-running "water war" between Fairfax Water and the City of Falls Church.

Some members of the legislature and the business community worried that, as originally written, the bill might give an unfair advantage to one utility over another--in this case, Fairfax Water, which was formerly known as the Fairfax County Water Authority.

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. They also entered a consent decree that
allowed each to have the "full, free and fair opportunity" to provide water to clients within areas where their service has overlapped in Fairfax County. The consent decree also bars each water supplier from otherwise excluding its competitor from providing service in those areas.

Lawmakers pulled the bill from the daily calendar to give all sides a chance to hammer out an agreement. On Thursday, Del. Jim Scott (D-Fairfax) offered an amendment to the bill that ensures the consent decree would not be disturbed. The bill then passed 74-25. The Senate also adopted the measure 39-0.

Supporters say the bill clarifies the time frame in which a water supplier can seek to require that developers tie in to its system.

By Fredrick Kunkle  | February 24, 2011; 3:50 PM ET
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