A key rating agency has upgraded the D.C. Water and Sewer Authority financial outlook to positive, citing the agency’s progress in addressing its capital needs while maintaining a strong financial position.
Fitch Ratings upgraded WASA’s bond rating from stable to positive and affirmed the AA status of the utility’s senior lien debt. Moody’s Investors Service and Standard & Poor’s also affirmed the public utility’s bond ratings, which will help keep interest rates down as WASA progresses on its 10-year, $3.2 billion capital program.
“Given the severe downturn in today’s economy, the affirmation of our existing double-A status by these major credit agencies is quite an accomplishment,” WASA Board Chairman William M. Walker said in a statement. “The better our credit rating, the more favorable interest rates we can expect. Since our rates are based on the cost of doing business, our customers benefit over time.”
Their customers will also pay more over time. The authority is proposing a 10 percent rate increase for fiscal 2010, the first double-digit boost since 1997, to keep up with its growing budget — $393.6 million in 2010, 8.4 percent higher than the previous year. With the rate increase and two fee increases, the average customer’s bill will increase from $49.98 to $55.52 per month.
The WASA board usually reduces the proposed rate increase before final approval, which won’t come until the summer.
The cost of repairing and upgrading the city’s aging water, sewer and wastewater treatment systems, as well as increasing costs for utilities and chemicals, are driving the proposed increase, WASA says.
WASA serves more than 580,000 residential D.C. customers with drinking water and wastewater services, and another 1.6 million people in surrounding counties with wastewater treatment only.
Teddy Kahn contributed to this report.
