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Pine Water Company's history of inconsistent customer service was also addressed in the decision through a requirement for the company to establish a 24 hr local telephone number for reporting leaks and service outages.
Another amendment, proposed by Commissioner Kristin Mayes, directs the ACC staff to prepare a report within three months that determines whether a moratorium on new water hookups should be instituted in the Pine Water Company service area.” Note: Pine Water Company spoke against a meter moratorium.
At the time PWC was limited to 25 new service connections per month. It was reported that during the past year less than 25 homes had been built.
A further amendment proposed by Commissioner Bill Mundell, directs the company to "participate in all appropriate efforts to discover and implement a regional approach to solving water shortage problems in Payson-Pine-Strawberry area." Note: As I recall PWC/Brooke and later at least two PSWID board members participated in the MRWRMS study along with other experts in the field including the town of Payson.
There were more written requirements but I think this covers the main items regarding the setting of rates.
The decision and order was signed on August 10, 2004.
According to ACC spokesperson Heather Murphy, the company’s rate of return had fallen to 1.91% due to increases in the cost of doing business, and the rate increase will boost it to 10%.#
“This shows a requirement now to get an operating margin that’s healthier – more in line with what we do for other utilities,” Murphy said.
The decision also includes Project Magnolia, the 10,800 foot pipeline that connects the Pine and Strawberry systems, in PWC rate base rather than allowing the company to charge a separate fee for its use.#
Judge Dwight Nodes, who wrote the decision, explained his rationale: “Inclusion of the pipeline in Pine Water’s rate base benefits the company’s customers by providing a conduit to wells in the Strawberry area that have historically produced more dependable sources of water,” he wrote. The decision requires PWC to maximize water purchases from Strawberry and provide additional guidelines for ensuring that water hauling is used only as a last resort.#
The decision also addresses PWC water loss rate of 12.6%. An amendment to the decision, proposed by Commissioner Mike Gleason, requires the company to provide a detailed plan that addresses ways to reduce water loss to less than 10%. Gleason called the current rate “unacceptable.”
ACC Docket# W-03512A-03-0279 Date filed: May 1, 2003
In the matter of the application of Pine Water Company for a determination of the current fair value of its utilities plant and property, a rate increase and for approval to incur long term debt.
Hearings, public comments and procedural conferences were held from December 8, 2003 to April 2004.
Some parts of Payson Roundup article dated August 12, 2004
“State Okay Pine Water Increase”
Pine Water Company customers will pay more for water beginning Sept. 1 following approval of a rate increase by the Arizona Corporation Commission. The average customer who paid $27.70 for 2,722 gallons in the winter will now pay $29.33, an increase of 8.1%. During the summer months, however, that same customer will pay 33.1% more for 3,269 gallons an increase from $29.56 to $39.33.
Pine Water Company originally requested a winter increase to $36.11 and a summer rate hike to $46.61, increases of 30.4% and 57.7% respectively. The decision followed the lines of a settlement agreement previously reached by Pine Water Company, intervenors, the Pine Strawberry Water Improvement District and the ACC staff. It grants PWC a revenue increase of 11.1% or $77,243, bringing total annual revenue to $731,291.
The company filed the request on May 1, 2003, asking the ACC for a rate increase that would generate an additional $268,993 in revenues. Robert Hardcastle, president of PWC parent Brooke Utilities, argued that the current rates – in effect since April 1, 2000 – had led to operating losses the last three years.
My problem exactly! I cannot seem to get rid of clothes and shoes. Two of my daughters teased me a few years ago about some knee length high heeled boots that I had kept for a number of years. So I got rid of them a few weeks later. Lo and behold the next year they are asking to borrow them as they "are in" Can't tell you how many times I have dug out old sweaters to wear again because I see similar styles in the store.
I will just have to completely take over the spare bedroom closets and when people come to stay, oh well! I did get my hubby to put up a clothes rail in my secret room as I call it, which has a deep sloping roof. Other than that the only suggestion I can pass on is to store used plastic grocery bags inside empty tissue boxes. I keep prowling around the house looking for nooks and crannies such as Tom suggested but I'm out of luck :-)
Interim Rate Relief. Mr. Hardcastle claimed the Company’s current rates do not provide for recovery of hauling water from outside sources during periods of emergency shortages. He stated Pine Water has not recovered any of the costs incurred for obtaining supplemental water and that these unrecovered water hauling costs total hundreds of thousands of dollars. Hardcastle said without immediate rate relief, the Company will face economic and operational collapse. He stated further that, because permanent rate relief will not be available until Spring 2004, at the earliest, without interim rate relief, serious, long term water service interruptions in 2003….will almost certainly occur.
Staff advised that the Company’s financial statements show that Pine Water has operated at a net operating loss for the past two years. Absent interim rate relief Pine Water will likely face serious, long –term service interruptions because it will be financially unable to pay for hauled water during periods of shortage. Based on the evidence we believe Pine Water Company has established the existence of an emergency under the criteria established in the Scates and Rio Verde cases.
Bond Requirement. Pine Water has agreed to post a $50,000 bond to protect against the possibility that permanent rates may be lower than the amounts collected under the interim surcharge.
Filing of Permanent Rate Application. Pine Water is required per Decision 65434 to file a permanent rate application by May 1, 2003. Therefore the Commission will have the opportunity, in the near future, to conduct a comprehensive evaluation of Pine Water’s financial condition and the reasonableness of the interim surcharge, and to further consider recommendations for long-term solutions to the water shortage in the Pine area.
The rest covered the Staff’s proposed surcharge mechanism calculation providing a reasonable means of providing Pine Water with revenue related to water augmentation costs until such time as a decision in the Company’s permanent rate case is issued. Notification methods for stages 2, 3, 4 and 5, and how the public were to be notified, availability of a toll free telephone number for conservation stage status. Pine Water to submit to staff monthly reports May through September detailing each conservation stage change for the preceding month and the Company’s compliance with all notice requirements.
This order was signed by the ACC on May 16, 2003.
This page is about Decision# 65914 which covers for the most part water hauling and the losses incurred by Pine Water Company prior to their being able to pass the costs on to the consumer. It is a request for interim rate relief and the order was signed by the ACC on May 16, 2003. This happened before PSWID board was taken over by the BOS/Nelson/Jones. However, as it also happened in 2003 I included it.
On Feb. 18, 2003 Pine Water Company filed a revised Curtailment Tariff in compliance with the requirements of Decision 65435 (Dec. 9, 2002) Docket# W-03512A-0104. Decision # 65435 directed Pine Water Company to file a permanent rate case application no later than May 1, 2003. Company filed a concurrent application Docket# W-03512A-03-0106 requesting interim rate increases and an expedited hearing. The two document numbers were consolidated. “Since 1996, Pine Water Company has drilled 5 new wells in the area and has repaired more than 700 leaks in its system. It also completed Project Magnolia in 2001, which is a 10,800 foot pipeline linking the Pine Water and Strawberry Water Company systems.”
“Mr. Hardcastle asserts that it is likely the Company will be required to supplement its water supply by hauling water in to the service area during peak summer periods. He testified that, despite the Company’s efforts to reduce leaks, as well as the construction of Project Magnolia, Pine Water has needed to transport water in 1997-1998, 1999-2000, 2000-2001, and 2001-2002 to meet customer demand. Mr. Hardcastle explained the water shortage in the Pine area is due to hydrological and geological constraints. He stated that there is no aquifer below Pine and water in the area travels from north to south and east to west in the Rim area through fractured rock. Therefore, wells drilled in the area are often unproductive or produce limited volumes of water.” Mr. Hardcastle went on to explain that Gila County’s allowance of increased residential and commercial development in the area also contributed to the water shortage. He contends that Gila County has allowed the population in Pine to expand beyond the level that can be supplied from existing water resources in the area.
Explanation of CC&N. Certificate of Convenience and Necessity is to construct water utility facilities or operate as a water utility or to extend the service area under an existing Certificate of Convenience and Necessity held by the person.
In Feb. 2004, before the ACC, the Pine Water Company rate case continues and lawyer Mr. Gliege on behalf of PSWID makes application for the “Cancellation of Certificate of Convenience and Necessity”
In March, Pine Water Company claims that the District lacks actual authority to seek deletion of CC&N on behalf of its members. “Although it will likely claim otherwise District’s desire to acquire Pine Water’s assets is also the subject of a petition currently being circulated for the purposes of raising over $12 Million in funding. In short, only interest the District has with respect to Pine Water’s CC&N is in lowering the value of the Company’s assets while simultaneously attempting to acquire them, either through or under threat of condemnation”
February 26, 2004. Part of letter written by John Nelson on Gila County letterhead and
signed as County Manager/Clerk of the Board of Supervisors/Administrator – PSWID. Letter sent to Fennemore Craig, lawyer representing Pine Water Company before the ACC.
"3. The District is not circulating a petition “to buy, condemn or otherwise acquire Pine-Strawberry area water companies and/or assets” nor is the District endorsing such a petition."
Note: The petition said “Petition to incur Expenses Pine Strawberry Water Improvement District” “acquisition of the water supply, treatment and distribution systems of the Pine Water Company, the Strawberry Water Company and the water line known as Project Magnolia”
Payson Roundup April 19, 2004. CAWS backs Citizen Control.
Note: The petition ultimately failed due to lack of signatures from the public and from efforts made by a group CAWS (of which I was a member) which also held a public meeting advising the public of their concerns.
(To be continued)
Payson Roundup Feb. 2, 2004. “More Water First”
Water advisory member writes "John Q. Public is cordially invited to participate in the decision-making process." You gotta be kidding, Jim. Gila County claims they are representing our community through the PSWID "Advisory Group" even though the meetings are closed to the public, agendas are prepared by Gila County, no decisions are made by the Advisory Group, and no records are kept. The Advisory Group is nothing but window dressing to cover Gila County's hidden agenda in the name of PSWID.
As indicated letters from both sides of the argument were appearing in the Roundup.
Payson Roundup Feb. 26, 2004. True Facts Support Buyout.
Part of a letter also written by an Advisory Committee member who supported the petition and buyout.
“After all the rhetoric is considered and the vote is in, this community will have made a choice, and the only difference is in who will benefit from the choice we make.
Considering that we will all live with that choice, each property owner must research what each choice truly represents, and look at the real facts, then choose to support the proposed buy out of Brooke Utilities.
While others are trying desperately to confuse you with empty accusations or scare you with less than honest cost factors and the debt that would be incurred, those of us who are circulating the petition will only provide you with honest facts and hope you make the best choice.”
(More will follow about the rate case and Project Magnolia)
Payson Roundup January 19, 2004 “What’s Next for PSWID?”
Letter was written by another member of the Advisory Committee
Payson Roundup Jan. 29, 2004 Article “Group wants to force sale of water companies”
Bottom part of article:-
The PSWID board was dissolved by the Gila County Board of Supervisors in August after a series of resignations reduced the number of board members from seven to two. Gila County Manager John Nelson was named interim administrator. Nelson appointed a 12-person citizens committee representing a cross-section of the community to provide input until a new board can be elected next year. If the petition drive is successful, the PSWID will attempt to negotiate the purchase with Brooke Utilities, but if Brooke refuses, the companies can be acquired through condemnation.
"Hopefully, (Brooke Utilities President Robert Hardcastle) will be willing, but if not we'll have the power of condemnation," Pugel said. "There's no choice. It's eminent domain."
Myndi Brogdon, a spokesperson for Brooke Utilities, said the company is working on a response to the petition but has no comment at this time.
An informational brochure will be distributed to affected residents of Pine and Strawberry beginning next week. Petitions are available at Coldwell Banker Bishop Realty, ERA Young Realty and Prudential Arrowhead Realty, all in Pine.
The approximate price to purchase the two companies was given at $12,120,000. Various members of the PSWID Advisory Group objected to the presentation and to a petition circulated after.
A flurry of letters and some articles appeared in the Payson Roundup. Some letters were against buying the water companies at that time and some were for. Additional links can be found at the bottom of letters/articles.
Payson Roundup – Jan 15, 2004 “Petition Initiated without Representation”
Part of the letter written by Advisory Committee member:-
The petition states that "expenses shall not exceed $12.12 million and that ... property be assessed for such purposes." It does not itemize or estimate what each of the "purposes" will cost.
In fact, Brooke Utilities, which owns the two water companies and pipeline, has not suggested a purchase price and may not be interested in selling. The water system infrastructure has not been inventoried for repair, and at this time, the petitioners have no idea what it will cost to develop new water resources. How can we sign a petition that contains no estimates for the major purposes it advocates?
The petition's title, "Pine-Strawberry Water Improvement District Petition to Incur Expenses" may imply to the citizen that it has the authority of the PSWID behind it. However, this is absolutely not the case, making the title misleading. The petition was initiated by two people, Ray Pugel (owner of Bishop Realty) and Loren Peterson (developer of Strawberry Hollow and the Strawberry Hollow Domestic Water Improvement District). How can we sign a petition that implies the authority of PSWID when, in fact, it has no such authority or majority representation from that group?
Do the residents and property owners within PSWID understand that currently they are not represented by a board of directors from their district? Do they know that the recently appointed PSWID "Advisory Group" members living within their district and supposedly representing the viewpoint of property owners and residents, have no authority or voting power? How can we sign a petition that has not been scrutinized and accepted by a PSWID group or board that represents the interests of the taxpayers?
For my part, I cannot sign this petition. It is premature, requiring much more definition and study before we can understand the pros and cons of this large debt. We are all familiar with "taxation without representation" and for me, this is "petition (initiated) without representation."
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