Judge Oks Pine Water Rate Increase


The Pine Water Company moved one step closer to an interim rate increase with the release of the administrative law judge's recommendations.

Judge Dwight Nodes ruled that Pine Water Company's request meets the criteria for an interim rate increase established in a 1978 court case.

The three criteria established in that case are:

  • An emergency exists.

Nodes ruled that Pine Water Company has established the existence of an emergency.

"It is uncontroverted that Pine Water faces an emergency with respect to a lack of water supply and due to its precarious financial position," the judge wrote, pointing out that the company has lost money the past two years.

  • The company posts a bond to guarantee a refund if the interim rates are higher than the final rates determined by the Arizona Corporation Commission.

Pine Water Company agreed to post a $50,000 bond, with the amount based on 2002 purchased water invoices of about $40,000.

  • The commission undertakes to determine final rates after a valuation of the utility's property.

Pine Water Company is required to file a permanent rate application by May 1 which, the judge ruled, will give the commission the opportunity to conduct a comprehensive evaluation of the company and "to further consider recommendations for long-term solutions to the water shortage in the Pine area."

Nodes' recommendations now go before the commission at an open meeting scheduled for 9:30 a.m. May 13 and 14 in the commission's main hearing room on the first level at 1200 W. Washington Street, Phoenix.

"The commissioners may accept, amend, or deny the recommendations of the administrative law judge," ACC Public Information Officer Heather Murphy said.

In approving the interim rate increase, Nodes recommended that Pine Water Company's proposed charge of an additional 95 cents per 1,000 gallons "be replaced by a surcharge mechanism based on costs that are actually incurred for hauling water."

If approved by the ACC, the increase will be determined by a formula that divides a month's water hauling costs by water sold.

The judge also recommended approval of a revised curtailment tariff submitted by Pine Water Company with minor revisions.

The tariff, simply a plan for dealing with water outages and shortages of varying degrees of seriousness, imposes stronger restrictions and penalties on Pine Water Company customers in order "to ensure the equitable distribution of water in times of water shortages."

Nodes and Pine Water Company reached a compromise over methods of notifying customers when successive stages are reached. As a result the company will notify customers by first class mail at two critical junctures:

  • Moving from stage 2 to 3 when mandatory conservation and fines for non-compliance first come into effect.
  • Moving from stage 4 to 5 when the water supply situation reaches its most critical stage.

Pine Water Company spokesperson Myndi Brogdon said the company views the recommendations positively.

"By giving us some more enforcement capabilities, maybe customers will see that by conserving we can avoid hauling water," she said. "We have a few customers -- not many, but a few -- who have abused the stages and it's the majority that gets hurt."

Murphy said Pine Water Company customers can comment through the ACC'S website or by regular mail. Go to www.cc.state.az.us, then click on Divisions, Utilities. Then go to a section called "Can we help you?" and you will be walked through the public comment process.

Mail comments should be sent to:
Arizona Corporation Commission
1200 West Washington Street
Phoenix, AZ 85007.

Refer to docket number 104 to comment on the curtailment tariff and docket number 106 to comment on the interim rate increase.

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