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EPCOR Water discusses status of wastewater rate case

7/20/16

Elizabeth Medora
Staff

ANTHEM – EPCOR Water held an open meeting on July 14 to update Anthem residents on the ongoing wastewater rate case and to answer residents’ questions on the case.

“We want you to understand what the process is, how you can get involved and ask questions,” said Shawn Bradford, EPCOR Vice President of Corporate Services, as he described the purpose of the town hall style meeting. EPCOR has mailed customers notices on the wastewater case and has also taken the additional step of holding meetings in each wastewater district to answer residents’ specific questions about their district.

“You’re as involved in this process as we are. You need to have a voice,” Bradford said at the Anthem meeting.

The rate case process is time-consuming; in this case, a test year was completed in 2015 to give fresh data to evaluate expenses. Any changes in rates are likely still about a year away.

During the case review process, residents can intervene and register their opinions on what the outcome of the case should be. The Anthem Community Council is representing Anthem’s interests in the case and is intervening on behalf of Anthem. At the end of the review process, the Administrative Law Judge assigned to the case will issue a Recommended Opinion and Order, and an open meeting will be scheduled, at which the Arizona Corporation Commission may accept the Recommended Opinion and Order, choose an option from another party in the case, or create their own alternative option. After this process, rate changes would go into effect in approximately June 2017.

The rate case was initiated after Agua Fria district customers registered complaints about their high wastewater bills. Bradford said that the Corporation Commission ordered EPCOR Water to look at three alternatives for wastewater rates. Those options are full consolidation of the wastewater districts, full deconsolidation of the wastewater districts, and keeping the wastewater districts as they currently are.

“We’ve recommended full consolidation,” Bradford said.

Full consolidation combines EPCOR’s five wastewater districts into one, bringing together the Anthem, Agua Fria, Sun City, Sun City West, and Mohave districts. Combining the districts creates a larger customer base and lowers costs for the majority of the ratepayers.

Through full consolidation of the wastewater districts, each customer’s rate would be $41.02, after a three-year phase-in period. The Sun City district costs would increase, as those ratepayers currently pay $22.11 per month. Anthem customers’ monthly rate is currently $60.33.

Deconsolidation of the wastewater district would not impact Anthem ratepayers since Anthem is already its own district. Other, smaller districts would see skyrocketing costs.

“Deconsolidation would put some districts over $100 per month,” Bradford said. “We don’t think as a long-term alternative that makes any sense, so that’s why we’re supporting consolidation.”

In the same manner, EPCOR doesn’t see sticking with the status quo and keeping the current rate situation as a good solution. All the districts will need some level of infrastructure repair and replacement in the next 10 years, and having a larger customer base to share the costs helps keep bills lower.

“We need to be fair to everyone,” Bradford said, calling the $22 rate Sun City customers currently pay “too far below market.” He explained that the Corporation Commission takes into account rates that are “overburdening some customers,” such as deconsolidation would do to the customers of the small districts who would end up paying over $100 per month.

Bradford noted to that to help establish typical market costs, EPCOR asked ASU’s Business School to perform an independent analysis of wastewater rates; their analysis placed rates at about $49 per month.

At last year’s meetings that led to this wastewater rate case, customers showed strong division on what they each should pay. According to Bradford, ratepayers are less divided than previously, especially after learning more about the needed infrastructure for each district. While Sun City currently pays the lowest rate at $22.11, they’ll need over $57 million in capital investments in the next 10 years. Anthem will need over $31 million in infrastructure investments.

At the Anthem meeting, Bradford said that they are exploring options for settlement.

“We think there’s middle ground there,” Bradford said.

See more background on the EPCOR wastewater rate case at www.epcor.com/wastewater.