Letter to the Editor: EPCOR rates and what can be done?



ANTHEM – EPCOR Water held its Anthem district community meeting on May 9, at the Civic Center to discuss the “Interim Rates for Arizona Water Districts.”  These rates are set by the Arizona Corporation Commission (AZCC) based on what it costs to provide our service. 

Their presentation included traditional rate making capital and operating expense increases.  Our water rates were last set 11 years ago on December 31, 2008.  The interim rates were approved until EPCOR files the next rate case, scheduled for May 1, 2020. 

As a resident since 2002 and community activist for water issues for these many years, I prepared a public comment that in my opinion provides the underlying reasons for EPCOR’s high-water rates for Anthem ratepayers (customers on the east side of I-17).

It all started in 1999 with the cost and financing of a “state-of-the-art” water/wastewater treatment plant that used high-tech membrane filtration and reportedly had significantly greater utilization capacity then the projected need.  That is, it was costly and over built.

Not disclosed to new home buyers, Del Web fronted Citizens Water (original Anthem private water company), over $100 million dollars interest FREE for the plant and infrastructure to be refunded upon build-out in future rate cases. That essentially started in the 2008 rate case, approximately 10 years ahead of the projected build-out, with a requested a 102 percent rate-shocking increase by then AZ American Water. 

It was argued during the hearing that almost 50 percent of the rate request was due in refund monies. In fact, in the next rate case they requested $20 million in refund monies put into their rate structure.

At the 2008 AZCC decision, Chairman Gleason stated: “Anthem is an upscale rich community” in response to the decision for an 80 percent increase, yet Sun City with its large voting population pays one of the lowest rates. Gleason lived in Sun City.

AZ American Water then told us that we could not downsize our water meters to ¾-inch from 1-inch to save up to $500 a year because all homes with fire suppression systems or those that live in a gated community required 1-inch meters.  That proved to be untrue.

Anthem has been a “cash cow” for the first 10 or more years having a new plant and infrastructure.  Yet, huge increases have continued to burden us. My water/wastewater bill has increased 5.3 percent compounded annually (much higher than inflation), with refund payments continue in our current rates, perhaps in perpetuity.

To summarize: A costly plant; fronted interest free money not disclosed to buyers; politically tainted hearings pitting one community against another; misleading reasons to save rate payers up to $500 a year by meter downsizing; and continued higher rates for a new community with little or no infrastructure upgrades required or implemented.

What can be done?

Given and understood, we are all unhappy and, in fact, EPCOR acknowledges this prevailing anger.  Compared to Anthem, Sun City with its low rates is a proactive community that sent in 5,000 public comments to the Commission versus Anthem’s 1,000 during the rate case hearing. 

For the most part, we are a “reactive” or after-the-fact community when either a decision is announced or when you get you higher water bill. 

The AZCC has required EPCOR to include in their next (May 1, 2020) rate case application consolidation options as an alternative to treating all of the systems as independent.  One of the options is “regional” consolidation which is the mating up of districts with similar demographics. 

Therefore, if Anthem is included with one or more other districts, the number of customers increases thereby reducing the cost.  This is probably the most viable path forward.

But, your opinion and public comment to the commission is paramount to getting just and reasonable water rates in the future.  Don’t sit back and think that the Anthem Council or even RUCO will do the job entirely…… it doesn’t work that way. 

So, lets become much more “proactive” in the next case and voice our opinions in the form of public comment to the AZCC.