The average Pine Water Company customer will pay at least $25 per month more under a permanent rate increase proposed by the Brooke Utilities subsidiary.
The proposal, filed with the Arizona Corporation Commission May 1, includes a 49 percent summer rate increase of $13.42 for a customer using the summer average of 2,731 gallons per month. On top of that, all Pine Water customers would be charged a $10 a month water exploration surcharge and would also continue to pay the cost of hauling supplemental water.
No secret aquifer
In testimony included in the request, Brooke Utilities president Robert Hardcastle painted a bleak picture of a community that will most likely always have water shortages.
"There have been numerous calls by, among others, Gila County, developers, customers, and to some extent this commission, for massive capital investment by Brooke Utilities ...," Hardcastle said. "But our customers cannot drink or bathe in money, and to a large extent the lack of water is a hydrological reality no amount of capital investment can eradicate."
Hardcastle's testimony also cast doubt on theories that a major aquifer lies deep under Pine.
"There has never been proof of an aquifer below Pine," he said. "Rather, geological research suggests that water travels ... in the Mogollon Rim area through fractured rock.
County bears responsibility
Hardcastle once again blamed excessive development for exacerbating the area's water woes, citing a desire by Gila County to increase its tax base.
"The county has ignored the fundamental fact that the water supply in Pine is inherently limited, conditions known and acknowledged by many observers, including Gila County, for decades," he said. "Gila County has nevertheless allowed to population of Pine to increase to a level that exceeds the additional supplies resulting from the many improvements of Brooke Utilities."
Since Brooke acquired the Pine Water system in 1996, at which time the system was "in a state of nearly total disrepair," many improvements have been made, according to Hardcastle.
These include drilling 11 new wells, repairing more than 700 leaks, adding 270,000 gallons of storage capacity and constructing a pipeline between Strawberry and Pine called Project Magnolia.
Gila County District 1 Supervisor Ron Christensen disputes Hardcastle's charges.
"Mr. Hardcastle has a history of trying to blame somebody else for all his problems," Christensen said. "Gila County is not in the water business and has never been in the water business.... It's not (the newer) subdivisions that are out of water; it's Mr. Hardcastle's Pine Water Company, which has demonstrated an inadequacy to provide water to the community in the quantities needed."
The bottom line, Hardcastle told the commission, is that the current rates -- in effect since April 1, 2000 -- are no longer adequate to provide the company a fair rate of return. In fact, Pine Water Company experienced operating losses in each of the past three years.
If granted in its entirety, the proposed increase would generate an additional $268,993 in revenues and a rate of return of 10.93 percent. The proposal also includes a water supply augmentation plan and an education program for the company's 2,000 customers.
Initiatives under the augmentation plan include increased water storage, a progressive rate design that puts more of the cost burden on heavy users, exploration for water on public lands, and possible legislative changes that would protect Pine's scarce water resources.
In addition to a revised curtailment tariff that imposes stronger restrictions and penalties on Pine Water Company customers, the proposed education program incorporates several initiatives. They include mailings, local sign postings, toll-free information numbers, a media outreach program, and community "coffee table" meetings.
Hardcastle also emphasized that his company alone would not be able to solve Pine's water supply problems, calling on the ACC and "various other local, state and federal government agencies to develop strategies to explore and utilize additional water resources.
"And, despite all that effort, very little additional water may be available to Pine Water's rate payers," he said. "At its core, the water supply dilemma plaguing Pine, Arizona, is an act of nature, and no amount of planning, study and capital investment can change hydrological reality."
The rate increase proposal, a document over an inch thick, is now in a "sufficiency period" at the ACC.
"That's where the commission staff examines the application to make sure it meets all the requirements to begin processing," Heather Murphy, ACC public information officer, said. The ACC has 270 days to issue a final order and dispose of the case.
Pine improves to Stage 2
After dropping to conservation Stage 5 over Memorial Day weekend, the water situation in Pine has improved. As of Monday, the storage tanks were 91 percent full with 775,000 gallons.
The increase, from 40 percent and 339,000 gallons May 27, places Pine at Stage 2.
Customers should call (800) 270-6084 with questions, outages and complaints about water wasters. The other toll-free number, (877) 287-1795, provides recorded information on current water status and conservation levels.