Water Rate Hearing: More Heat Than Light

Residents struggle to understand proposed doubling of water bills

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Frustrated Rim Country residents trying to get answers to questions about a proposed doubling of their water rates spent this week’s Corporation Commission hearing mostly drilling dry wells.

Payson Water Company officials and Arizona Corporation Commission staff mostly deflected sometimes bitterly pointed questions at the Feb. 4 and 5 hearings in Phoenix. The commission staff will hold another meeting today, Feb. 7.

Many residents tried in vain to extract a promise that Payson Water Company will upgrade the system it bought from Brooke Utilities with the money that flows in after rates double. The company also wants approval to impose potentially expensive water hauling charges on East Verde Estates in the event of water shortages in the future.

When East Verde Park resident Tom Bremer asked what the company had done to boost production, owner Jason Williamson only said he was looking into solutions.

“We are researching and evaluating the best way to expand capacity,” said Williamson. “We are going to be ordered to fix production by this Commission after the hearing. We have already started the process of asking (the federal) Water Infrastructure Fi­nance Authority (WIFA) for grant funds. I don’t know ... what the best way is to improve the situation out there, but we will find out.”

Williamson offered no guarantee he will improve the system if granted the rate increase. However, his accountant, Thomas Bourassa, said the new rates will at least make the company solvent.

Payson Water Company lawyer Jay Shapiro said the company and the ACC staff had narrowed their differences and were close to an agreement.

However, he said customers who intervened in the case were causing the hearing to go on longer than it would have.

“We would ask this Commis­sion to grant reasonable and prudent approval of rates,” he said, noting that the company hasn’t had a rate hike since 2000.

Each of the eight communities affected by the rate hike has its own concerns.

Whispering Pines, near the headwaters of the East Verde River, argued it has enough water and shouldn’t have to pay to solve problems in other communities.

Mead Ranch wonders why no plans for improving the system are included in this significant rate hike.

Mesa del customers believe drilling a well would end their water shortages more cheaply than hooking up to the C.C. Cragin pipeline.

Gisela and Deer Creek residents say they also have enough water and don’t want to foot the bill for increasing capacity elsewhere.

East Verde Park residents asked why the company doesn’t drill another well instead of seeking to impose water hauling fees that could dramatically increase bills in the summer.

In his testimony before the ACC administrative judge Dwight Nodes, Bourassa said in all of the years he has testified at rate hearings, he has never experienced such a contentious and complicated hearing.

The Corporation Commission board will not make a decision on the proposed rate increase for some time, as the commission staff and the water company continue to analyze the company’s costs and water needs.

Comments

Scherry Duncan 10 months, 1 week ago

*I live in Mead Ranch serviced by this company. Many homes here have no water pressure. No improvements have been implemented since our water service was sold to Brooke Utilities in 1999 and according to Jason Williamson owner of Payson Water Company, no improvements are planned for our community.

*I am concerned that the ACC has not questioned PWC's Miscellaneous expenses. In the original filing, then owner Robert T. Hardcastle, said, "The most notable expense increases are related to electrical utility costs, insurance costs, property taxes, telephone costs, and chemical costs related to water treatment. Otherwise, legal expenses related to customer litigation, in significant part resulting from past Commission recommendations, have caused the Company's costs to increase significantly."

*However, by far the most notable expense increase for PWC has been Misc. Expenses. It has increased from $41,752 in 2005 to $249,525 in test year 2012. This is a 500% increase. Misc. Expenses are mainly going toward covering a Central Office Overhead allocation of $197,722.

*Are we to be expected to pay "extravagant" office expenses?

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