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EPCOR straddles line between efficiency, improvements

Posted 11/23/22

One of the biggest private utilities in the region aims to strike a balance.

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EPCOR straddles line between efficiency, improvements


One of the biggest private utilities in the region aims to strike a balance.

EPCOR, a private utility serving about 310,000 connections, is working to improve its current infrastructure while looking for ways to make its water and wastewater systems more efficient.

EPCOR is evolving at the same time current drought conditions are impacting the Colorado River — a main water source in Arizona and the Southwest.

EPCOR is the largest regulated water company in the state. The company serves 310,000 connections or 780,000 people across three states including Arizona, New Mexico and Texas.

The vast majority of those customers are in Arizona, specifically in the Phoenix metro and San Tan Valley area.

In residential homes, EPCOR officials are rolling out trial phases of advanced metering infrastructure — a water meter that allows utilities to remotely collect customer usage data in real time.

The systems allows water officials and customers to see how much water is being used on a consistent basis, said Rebecca Stenholm, EPCOR spokeswoman.

Leaky toilets and other water leaks can be found more quickly. Traditionally, hiccups that could go unnoticed can be detected much easier by tracking water use by the hour.

Customers are able to log into an online portal to see real-time water use with the company’s goal of giving customers “a lot more” control, Stenholm said.

Basic water meters are estimated to cost between $10 million and $12 million for all EPCOR connections. The more advanced meters likely would cost significantly more, company officials said.

Officials expect a switchover to new meters could be complete in the next three to five years.

“We are looking at a premium to (switch out basic meters for upgraded versions),” said Joe Gysel, EPCOR president and CEO.

“(Upgraded meters would cost) probably two times that.”

Dealing with drought

As the largest private water company in the Valley, with customers steching from the Sun Cities and Anthem to Queen Creek, EPCOR also is dealing with a more than two decade drought in the Southwest.

While most Valley water systems — typically those run by municipal governments — rely primarily on surface water from sources such as the Salt and Colorado rivers, EPCOR’s primary water source is groundwater, at 71% of its water portfolio.

The remainder of the company’s water portfolio is 13% Central Arizona Project water from the Colorado River; 8% of stored water which typically is surface water that is put back into local aquifers; and 4% each of other surface water and reclaimed water.

Pumping water back in the ground — known in the industry as storage — is a good way to make sure water gets used for a good purpose, Gysel said.

After several decades of a move to surface water, groundwater pumping has been urned to as a replacement for CAP water. Local experts expect groundwater pumping likely will increase in the future, according to ASU’s Kyl Center for Water Policy at Morrison Institute.

That leaves reclaimed water, or treated wastewater used for industrial purposes such as the watering of golf courses, as a potential renewable source, he said.

“(We treat) wastewater as a new water source,” Gysel said. “But it’s not toilet to tap.”  

The EPCOR president said water efficiency is among its top priorities.

EPCOR’s water loss sits at 7% to 9% in its systems — within the permitted 10% of the rules of the Arizona Corporation Commission — regulatory authority over private water companies and private wastewater companies in the state.

EPCOR is just one of more than 400 individual water systems operated by nearly 350 companies under the ACC’s jurisdiction.

“EPCOR is focused very much on water efficiency,” Gysel said. “(Little or) no water loss — that’s a water gain in our mind.”

But EPCOR officials are working on another front toward better efficiency. 

The company is busy consolidating small water companies.

In September, EPCOR agreed to submit an application to help construct a standpipe for use by the Rio Verde Foothills community.

Rio Verde Foothills is an unincorporated subdivision that currently isn’t served by a municipal water system, relying on “water haulers to truck water into the area, while some residents have private wells.

The community had relied on city of Scottsdale for that water, but the city is cutting off that supply Jan. 1, 2023, because of continuing drought conditions in the state, officials have said.

EPCOR was “approached by Rio Verde Foothills” officials to help provide a viable solution, Stenholm said. A water hauling station for Rio Verde Foothills would be similar to one near the Anthem and Desert Hills area.

“If approved, construction of the standpipe could take up to 36 months to complete,” according to a press release.

The application must be approved by the ACC.

The infrastructure cost to supply standpipe service is “likely to be at least $6 million” — not including land or the cost of procuring water resources,” according to an Arizona Corporation Commission filing. “That figure could reach $10 (million) to $12 million.”

Rio Verde residents are expected to have to pay for the standpipe.

The figure is likely to cost more because “EPCOR will need new facilities including a well, storage tank, station infrastructure, SCADA (supervisory control and data acquisition system),” according to the filing.

Rio Verde Foothills is adjacent to the western boundary of the Rio Verde water service area which EPCOR already serves about 2,800 connections.

“These (Rio Verde Foothills) homeowners need a solution,” Stenholm said.

Consolidation attempts

Adding an area like Rio Verde Foothills to its territory is not EPCOR’s first attempt at consolidating. In January, the state utility commission passed a measure that changed water rates for EPCOR customers and called for consolidating some of the company’s water operations around the Valley and state.

The ACC passed the recommended opinion and order 5-0 to make Sun City, Sun City West and Paradise Valley standalone water districts to help update the EPCOR revenue requirement, which is the amount the company needs to earn to deliver service.

EPCOR needs to do its best to earn up to the revenue requirement to recover costs.

The ACC order said the new grouping of districts include he Agua Fria, Anthem, Chaparral, Havasu, Tubac and Willow Valley in what it calls Group A. Group B water districts include Mohave and North Mohave, under the new ruling.

Stenholm said new water rates will be phased in over a three-year span for groups A and B.

For the three standalone districts, new rates will stay the same until a new rate case is decided, Stenholm said.

The decision included additional increases every 12 months through 2024 for the districts that don’t include the standalones —  meaning the decision will have Group A and Group B customers see three overall increases in the next three years.

After 2024, Stenholm said she expects rates to be evaluated again by the ACC.

EPCOR has completed two large projects and has one in progress. Large projects include construction on the new Copper Basin Water Reclamation Facility and the $48 million expansion of the Loop 303 Water Reclamation Facility — was recently completed. 

The new Copper Basin Water Reclamation Facility will replace an outdated facility and benefits 14,000 existing San Tan Valley wastewater customers plus allows for future growth.

The new facility is on track to be complete and in service by December 2023.

The $21 million expansion of the Pecan Water Reclamation Facility was also completed this year. The major facility improvement was the first since EPCOR took ownership of the former Johnson Utilities.

San Tan water and wastewater service covers an area that is “roughly 160 square miles in size and includes a portion of Queen Creek, a portion of Florence and unincorporated” San Tan Valley.

EPCOR, line, efficiency, improvements