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Richmond officials outline regional water capacity, planning and rate scenarios amid data‑center growth
Summary
City Chief Administrative Officer O'Dee O'Donnell and Public Utilities Director Scott Morris told the Organizational Development Standing Committee on Aug. 25 that Richmond's water plant is a regional asset supplying roughly 132 million gallons per day to about 530,000 residents and that the city is developing a 10‑year capital improvement plan and rate models that test varying state funding scenarios.
City Chief Administrative Officer O'Dee O'Donnell and Public Utilities Director Scott Morris on Aug. 25 told the Richmond City Council’s Organizational Development Standing Committee that the city is coordinating with Henrico, Chesterfield and Hanover on a regional water plan, capacity needs and rate models as the region grows.
O'Donnell and Morris said Richmond's treatment plant contributes to a regional capacity of about 132 million gallons per day serving roughly 530,000 residents. Morris described work since January reviewing condition assessments, outside engineering reports and the Virginia Department of Health sanitary survey and said the region has started a 10‑year capital improvement program (CIP) and multiple rate‑model scenarios for council and state budget consideration.
The officials said they are using a regional approach — with wholesale customer contracts that set point‑of‑entry capacities — and are testing rate assumptions that include a range of possible state funding levels. "We inputted several rate models, assumptions and scenarios," Morris said, adding the group ran a regional tabletop exercise in August that examined cybersecurity, point‑of‑entry capacities and resilience.
Why it matters: Richmond supplies drinking water not only for city residents but to neighboring counties and the rate and CIP decisions will affect households and large wholesale customers (including data centers) across jurisdictions. Council members repeatedly asked whether commercial customers such as data centers will subsidize capital costs and how the city will protect residential affordability.
Key details - Capacity and demand: Officials said the system's historical demand averages about 96 million gallons per day and current regional capacity is roughly 132 million gallons per day, leaving headroom but requiring investment for long‑term reliability. - Contracts and point‑of‑entry limits: Wholesale purchasers submit annual projections for each point of entry and may draw water up to contract maximums. Morris said the city's review does not disaggregate residential, commercial and industrial use in the annual submittals; jurisdictions report projected average‑day and max‑day values by point of entry. - Data centers and commercial growth: Council member Gibson asked how projected demand from large data centers (she cited recent and planned investments by Google and others) factors into the CIP and rate models. Morris and O'Donnell said the region tracks point‑of‑entry projections submitted by jurisdictions and that capacity remains available under current contractual maximums, but they acknowledged the need to address equity in cost allocation. "We start every conversation with an affordability matrix," O'Donnell said, adding the administration is "looking at capacity and how we invest and who pays for those capital improvements." - Rate modeling and state funding: The presenters said they will test rate models under different levels of state contribution — including a scenario with zero state funding — and that state budget outcomes could change projected customer rates. Council members pressed how assumptions about state aid are being used in models and whether state grants might require contract or governance changes. - Compliance and repairs: Morris said the city is reviewing condition assessments and has implemented components of the VDH consent‑order work; Donnell told the committee roughly 85% of consent‑order items had been addressed or incorporated into the CIP.
Council reaction and follow up: Members sought more disaggregated documentation — for example a chart showing projected residential versus commercial use and point‑of‑entry projections from regional partners — and asked for earlier circulation of briefing materials ahead of committee meetings. Councilmember Gibson asked for "talking points ahead of these meetings" and a clearer breakdown of commercial versus residential demand. Morris said the administration would finalize rate‑model drafts within about one to two weeks after further council member meetings and then coordinate with regional partners.
What comes next: The administration plans to bring a formal proposal on the rate model and budget assumptions to regional partners and to city council for review; those proposals will inform the city's FY‑26 water budget request and any state budget submissions. Council members requested more frequent briefings and a written summary of the city's compliance status with VDH findings.
Ending: Officials emphasized that while the system has capacity today, the plant — built in 1924 — requires sustained investment and regional collaboration to assure reliability. Council members asked for additional documentation and a public briefing schedule as the rate models and ten‑year CIP are finalized.
