Commission Decries ‘Paltry’ Brooke Report

Commissioners plan probe of complaints at Mesa del Caballo

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Andy Towle/Roundup - atowle@payson.com

‘The commissioners were clearly not satisfied with a very skimpy report’ Kristin Mayes, Chairman, ACC

Brooke Utilities head Robert Hardcastle may have hopped from the frying pan into the fire with a three-page report to the Arizona Corporation Commission explaining why Mesa del Caballo kept running out of water this summer.

“The commissioners were clearly not satisfied with what I’d have to call a very skimpy report,” said Commission Chairman Kristin Mayes.

She said the commission will ask Brooke to defend its actions at a Sept. 22 Corporation Commission meeting in Phoenix, which could be the first step toward revoking the private water company’s exclusive right to sell water in the community.

The brief report by Hardcastle said use peaked just as well production slumped, forcing the water company to impose Stage 5 water restrictions repeatedly.

The company said it had to spend $4,000 per day hauling water up the hill from Gisela to keep taps from going dry in the 400-home community on Houston Mesa Road.

As a result, Hardcastle said he would be seeking higher water rates, especially if he has to go to all the expense of drilling a new well. The report suggested the financial impact on water users will be “substantial.”

Besides, he noted in the report, 2009 was not much different than any of the last three years, during which time Mesa del Caballo has been on some sort of water conservation level 20 to 30 percent of the time.

Wrong answer, judging by the reaction of members of the Arizona Corporation Commission.

“What really stands out is that Mr. Hardcastle has known there is a problem on the Mesa del Caballo system for at least three years and hasn’t done anything to resolve it,” said Mayes. “I don’t have much sympathy for this notion that he only had a week to put together the report. He’s had three years to come up with a solution and he hasn’t done it.”

Company spokesmen have been directed not to speak to the news media.

In the report, Hardcastle noted that “during the period of July 2009, customer consumption increased dramatically over any month during the same year and over the same month in the previous year. In July 2009, more than 1.9 million gallons of water were sold to approximately 385 customers. This volume computes to approximately 5,096 gallons per customer. The highest customer use in the same month was almost 20,000 gallons. During this month, there were 28 customers identified with more than 10,000 gallons consumption.”

The report showed a 41 percent increase in water use from July 2008 to July 2009, but just a 2 percent increase in “active customers.” The report shows that water use in the community varies substantially from month to month, with July setting the high point for the past 12 months. However, water use rose to 1.8 million gallons in October and dipped to a low of 1 million gallons in February.

The ACC-approved water conservation rules allow the water company to shut off the water to any customer who uses an excessive amount of water during a Stage 5 conservation alert. The customer must then pay $600 to get their water turned back on. Brooke Utilities cut off several customers during the water alert. Some of those customers complained they didn’t receive written notice and disputed the meter readings.

“There was nothing in the report about those complaints,” said Mayes. “That’s one of the reasons we’re going to ask Mr. Hardcastle to appear before us to answer those questions as well. It was a paltry report that did not answer the questions of the commission.”

One of those complaints was filed by Stephen Gehring, owner of the Houston Mesa General Store, who had his water shut off after alleged excessive use. Gehring claims that air trapped in the system after the pipes ran dry made his water meter spin when water was put back into the system, making it look like he was using a lot of water.

Gehring’s complaint asserts that the company retaliated against customers who complained and that the company “knowingly and intentionally caused undue financial burden or economic hardship on customers who are struggling to survive.” He said company representatives read his meter daily and at one point claimed he’d used 500 gallons during a 12-hour period when the system had crashed and had no water in it at all.

However, the commission hasn’t yet gotten any account from the company on those specific complaints. Instead, Hardcastle’s response focused on the peak in demand and the long, slow slide in well production.

In the long term, the report suggests the community can obtain adequate water by hooking into Payson’s Blue Ridge pipeline, which will run right past its doorstep on Houston Mesa Road. Because of its location, Mesa del could tap into that water source starting in about 2013 more cheaply than any other community along the pipeline route.

Hardcastle’s report noted, “The Company has offered financial and operational participation and stands ready to move forward. Further, the Company has long engaged discussions and negotiations with Salt River Project for a water allocation of its own from this pipeline. SRP has given the Company a population projection and supply forecast assignment that it is working on. SRP indicates that any water allocation contract with them will require approximately 12 to 18 months to accomplish.”

However, in the short term the report concluded “it seems appropriate that additional interim ground water sources are needed. These sources are difficult to locate because of property availability and the lack of historical hydrological supplies. It is possible that a deep well located within the perimeter may be necessary to solve this interim problem. That solution will be very expensive, time-consuming and rate burdensome upon the approximately 385 customers.”

One chart shows that well production rose by about 60 percent between 2002 and 2005, but has been declining ever since. In 2009, production levels had dropped down below the 2002 figure.

In 2007, the community had 252 days with no water alerts, 65 days at Stage 3, 10 days at Stage 4 and no days at Stage 5. In 2009, the company reported only 99 days with no restrictions, six days at Stage 4 and five days at Stage 5.

Mayes said the company has been running short on water and tracking the decline of well production for years without apparently doing anything to find additional water supplies.

“There really is no excuse for not providing adequate water supply,” said Mayes. “I think the commissioners have to consider whether we want to have an order to show cause” to revoke the company’s monopoly certificate to sell water in the community.

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