Water Rates Jump

60% increase will take effect in July


The Arizona Corporation Commission (ACC) approved a big rate increase for the unincorporated communities served by Payson Water Company (PWC) after making some minor adjustments based on customer appeals.

The average customer will see their bills rise by 60 percent, which represents the first increase in their rates in a decade. People who use more water may see their bills double.

The commission approved only a few changes from the rate structure that has been the subject of protests and hearings for months.

Gisela customers will get a slightly lower rate than originally proposed and face less of a penalty for high water use. Residents there complained they have plenty of water and use it for orchards, farms and livestock and therefore shouldn’t suffer a rate structure designed to prevent homeowners from using too much water.

PWC will create options to assist customers who need help paying their water bills, which often soar in the summer and drop in the winter.

Only those Mesa del Caballo customers that use more than the average will be charged for Town of Payson water, which now reaches the community through a just completed pipeline.

The ACC ordered PWC to submit plans for improvements to the infrastructure through 2017. Customers complained bitterly that the company wanted to double their water bills, but didn’t promise to add wells and storage tanks to end chronic shortages for many communities.

The rate structure will include a cap on water hauling charges for East Verde Park. The new water hauling charges will mean steep increases on top of the base rate when summer use drains storage tanks. The charges are supposed to cover the cost of hauling in water by truck.

Customers will see the increased rates on their August bill for July usage.

“So, it looks like PWC will get what staff recommended back in January and PWC agreed in February, for all communities except Gisela, who will get a modest break ($2 on monthly fee and $.60 per thousand gallons),” wrote Tom Bremer, an East Verde Park resident who intervened in the case.

In an 88-page ruling, ACC Administrative Law Judge Dwight Nodes reviewed the reasons for the rate hearing and the filings by ACC staff, the water company and the numerous interveners.

Originally, PWC asked for a 125 percent rate increase, saying the added revenue would help salvage a fragile water system depending on small, 40-year-old wells. An ACC engineering report agreed with that basic assessment.

However, ACC staff countered by proposing a much lower rate increase than PWC wanted.

Then the interveners representing the homeowners demanded to know what the company would do with all the extra revenue.

In the end, the ACC and PWC agreed to a 90.39 percent increase overall, although the rate would depend on water use — with higher rates for higher volume users.

The ACC estimated the rate increase would boost the bill of a customer using 2,903 gallons per month by 60.22 percent — rising from $21.60 to $34.61 per month.

A Gisela resident (with their special rate) that used 6,961 a month would see an increase of 135.53 percent from $27.30 to $64.30. Figures filed by the company show that Gisela residents use far more water on average than customers in the rest of the system.

The rate case dragged on for more than a year with filings flying furiously back and forth between customers, staff and PWC representatives. The actual hearing encompassed almost a week’s time in the ACC hearing room in Phoenix.

The commission also held a special meeting in Payson to gather comments.

At times, the interveners filed serious accusations such as Steve Gehring’s claim the company “financially raped, pillaged and burned their customers every which way ... [and the] complacency of the [Commission] ... has allowed and furthered this financial rape of the customers ....”

The language prompted Nodes to remind the interveners that he could have imposed penalties, but decided not to do so.

“(P)arties to a proceeding before the Commission are reminded that actions taken, and statements made, before, during, and after the close of the hearing are expected to reflect a level of conduct consistent with that required in Superior Court,” Nodes wrote in his decision.

For its part, PWC assured the ACC and interveners it has diligently worked to improve long-standing problems, despite a shortage of capital.

Improvements include:

• Building a pipeline connecting Mesa del Caballo to Payson’s water system. The commission approved a roughly $7 a month surcharge on Mesa del water customers to pay for hookup.

• Re-establishing water sharing agreements with well owners in MDC.

• Applying for a state WIFA grant to study the water supply challenges at East Verde Park which relies on several shallow wells.

• Establishing a new customer service center in Arizona.

• Replacing flow meters on wells in Gisela and East Verde Park systems that had shown more use than production in the past.

• Changing the disconnection policy to use door hangers before shutting off water.

Payson Water Company’s filings said the rate increase will allow it to finally become financially viable and qualify for loans to improve service to its customers.


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