Richmond officials outline regional water capacity, 10‑year CIP and rate modeling

Chief Administrative Officer O'Dee Donald and Public Utilities Director Scott Morris updated the Richmond City Council Organizational Development standing committee on regional water coordination, telling members that the city's water plant and partner systems currently have spare capacity but will require multi‑year investments and new rate models to support regional growth.

"We really don't do this alone," CAO O'Dee Donald said, describing the plant and the region's partners in Henrico, Chesterfield and Hanover. He highlighted the city's water plant — built in 1924 — and the regional totals the plant helps supply.

Morris said staff have reviewed condition assessments and reports from the Virginia Department of Health (VDH), the Environmental Protection Agency and engineering firms including HNTB and SEH. Since January the team has met with regional partners, held a CIP meeting on Aug. 18 and conducted a regional tabletop exercise Aug. 25 that examined cybersecurity threats, resilience, points of entry and capacity planning.

"We did the first CIP meeting in August 18, and we also looked at our budget and our rate model development that same day," Morris told the committee. He said the region agreed in principle to move forward with a proposed 10‑year capital improvement program and that staff have been running several rate models and assumptions to test affordability under different levels of state support.

Donald and Morris gave a capacity snapshot: the regional system supplies roughly 132 million gallons per day of drinking water and serves about 530,000 residents, while historical demand has been about 96 million gallons per day. Morris told the committee that wholesale customers report contract maximums and average day use for their points of entry; Chesterfield's contract maximum was presented as 32 million gallons (average 9.14) and Henrico's as 35 million (average 12.43), illustrating how contractual point‑of‑entry caps are used to manage allocations.

Council members pressed staff on commercial demand driven by large data centers and how rate structures will allocate costs between residential customers and large industrial or corporate customers. "We want to make sure that those commercial customers kick in equitably," Donald said, adding that staff begin rate modeling conversations with an "affordability matrix" focused on customer affordability and that the work is ongoing.

Morris said staff expect to finalize rate model scenarios and present them to council members for feedback within "the next week or two," then coordinate with regional partners before a public rollout. He also described progress on a hydraulic model and staff training and offered to present more detailed system‑level analysis to the Council's Government Operations committee.

Committee members requested more documentation and clearer disaggregated projections (residential vs. commercial use) from the city's wholesale customers and urged transparency about assumptions used in rate models. Donald said some information is sensitive for security reasons but pledged to provide more data as the analysis matures.

Donald and Morris also told the committee that they are implementing work tied to a VDH consent order and that a summary of corrective actions is about 85 percent complete. Staff said they will come back to committee with the finalized rate scenarios, proposed budget requests and an implementation schedule once regional partners and council members have reviewed assumptions.

The presentation closed with staff committing to additional briefings for council committees and to post materials for council review as the budget and rate development process proceeds.