Brooke Rate Hike Still In Works

ACC official warns of 'rate shock' for customers

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While customers in Pine are awaiting the return of restriction-free water usage, other customers of Brooke Utilities water companies in the Rim country are waiting for the other shoe to drop with the news of a rate increase.

About 1,710 customers in the United Utilities company and 782 on the E& R system (which includes Star Valley, Quail Valley, The Knolls, Deer Creek, Flowing Springs, Whispering Pines, Geronimo Estates, East Verde Park Estates, Strawberry Knolls and Tonto Basin) are facing the first rate increase request of the Arizona Corporation Commission (ACC) by Brooke Utilities.

Brooke is attempting to standardize fees among its various service areas. The proposed rates would be up to a 100 percent increase for some customers for water use above the minimum 1,000 gallons monthly. Service line and meter installation fees would be raised as much as $200 for some areas.

The degree of the proposed increase is due in part, officials say, to the relatively long length of time since the water systems' customers have seen a rate hike.

"We like to see the utility companies in here about every two to three years," said Rodney Moore, customer service specialist for the ACC. Requests within this time frame give the ACC a chance to review a utility's book and also prevents "rate shock," Moore said. Rate shock is what happens when customers go many years without an increase, and then a company asks for a large hike.

Which is exactly the concern of the Lantagne family of Tonto Basin. Rates in the Tonto Basin area have not been increased since 1988, said Bob Hardcastle, Brooke Utilities president -- eight years before his company purchased the water system there.

RV park owner feels imperiled
Gary Lantagne said Brooke's requested rate increase could put his RV park out of business.

"They got me by the jugular and I'm screaming 'cause it hurts," Lantagne said.

Using the proposed rate chart and his recent lowest and highest water bills, Lantagne found some numbers that startled him.

His RV park was billed $19.78 in July 1998 for 1,900 gallons of water. He said that with the proposed new rate, the bill would jump to $272.42.

He was billed $127.75 in February 1999 for 45,500 gallons. That bill would jump to $1,658.90, Lantagne said -- the definition of rate shock, says Moore.

"By law (Brooke) is entitled to a rate of return," Moore said, although he said he sympathizes with the Lantagnes' situation . Moore characterizes Brooke's rate requests as more or less in line with what utilities are charging throughout North America, although the final say will come from the three members of the Arizona Corporation Commission.

If the water utility had been requesting rate hikes about every two to three years, the rate would be more in line and less likely to cause such a panic among its customer base, Moore said.

In reviewing a rate hike request, ACC staff members study all aspects of the utility's operations, engineering and customer service, Moore said. Accountants and other ACC specialists pore over the records.

But lack of information is holding up consideration of Brooke's request, Moore said. "He (Hardcastle) could not physically produce the rate information because there was not sufficient bookkeeping (by previous owner of the water system)."

Brooke filed its request with the ACC in March.

The ACC staff must have a completed report to the ACC auditor by Nov. 1. That will begin another review period which will end with a hearing on Jan. 31. There will be an opportunity for the public to speak on the day of the hearing.

After the hearing, the proposed increase will go before corporation commissioners at their next regular meeting. If approved, it will be June 2000 before Brooke's affected customers see their bills go up.

Up to this point, Moore has received what he called little public comment, other than the Lantagnes. "I'm surprised by the lack of involvement," he said. His office has had approximately 11 phone calls, 50 letters and 191 verified signatures on petitions in opposition to the proposed increase.

How to make a comment
Those who want to make a comment about the proposed rate increase can contact Rodney Moore of the Arizona Corporation Commission at 1-800-222-7000. Written comments can be sent to the Utilities Division, Arizona Corporation Commission, 1200 W. Washington Ave., Phoenix, AZ 85007.

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