Sun Cities residents are just now feeling the effects of EPCOR Water Co.’s interim rates grant by the Arizona Corporation Commission earlier this year.
The ACC March 28 voted to allow an interim rate increase for EPCOR. The commission in January ended up deadlocked on EPCOR’s water rate increase and district consolidation when Commissioner Sandra Kennedy abstained and the vote ended with a 2-2 tie, meaning nothing changed. EPCOR officials then requested the interim rates.
The interim rates did not seem to have any effect until July 1, according to Robert Becker, a Sun City condo association board president. However, by the ACC order they began April 1.
“We saw our water bill jump up about 40% in the the last two months,” he said. “That’s really going to make it difficult on our budget.”
Mr. Becker said his association has grass in its common areas, which accounts for the high increase in water bills for the summer. He added associations with desert landscaping may not see such an increase.
The interim rates mean an increase for Sun City of 38.13%, which will increase the average residential water portion of the bill by about $7.38, according to Greg Eisert, former Sun City Home Owners Association Governmental Affairs Committee chairman. According to information on the EPCOR website, www.epcor.com, Sun City rates will go from $20.92 per 7,000 gallons to $28.45. Sun City West rates will go from $35.04 per 7,000 gallons to $39.23.
Part of the ACC order was for EPCOR to start over with a new rate request, which must be filed no later than May 1, 2020. If the request will be filed sooner and if it will include sistrict consolidation, as the previous rate had, was uncertain. But it appears EPCOR officials are targeting a filing date as close to May 1 as possible.
“The new case will be based on a 2019 test year,” Rebecca Stenholm, EPCOR public and governmental affairs director, stated in an email. “Because the test year has not ended, we don’t yet have any detail on what those numbers or regional options might look like.”
She added the ACC order to request a new rate included instructions to offer consolidation options.
“Based on a May 1, 2020 filing date, we expect a decision roughly mid-2021, about two years from now,” Ms. Stenholm stated. The application and the end decision by the ACC would also factor in the interim rates that are currently in effect.”
If the ACC determines rates should be lower than what interim rates are generating, customers would see a decrease and refund, plus 10% interest), Ms. Stenholm explained.
“On the flip side, if the ACC determines that rates are not recovering current costs, any increase would cover the difference between interim rates and what rates should be,” she stated.
SCHOA officials regularly discuss the water and wastewater issues during their monthly meetings. The next SCHOA board meeting is 9 a.m. Tuesday, Nov. 26 in the meeting room at the SCHOA office, 10401 W. Coggins Drive.
Gail Warmath, SCHOA Governmental Affairs Committee chairwoman, attended a two-day meeting at the ACC Oct. 17-18 designed to review ACC procedures in rate request cases. She said the attorney representing SCHOA and the Property Owners and Residents Association of Sun City West in a lawsuit to appeal the 2018 ACC decision to consilidate five wastewater districts as part of an EPCOR rate request for that utility was in attendance.
“You could tell the commissioners were nervous because we have that lawsuit pending,” Mr. Eisert, who also attended the meeting, said.
That lawsuit, which was scheduled to have oral arguments in June, is delayed in the courts after the first judge assigned to rule in the case died earlier this year. Mr. Eisert said a new judge was assigned and the new judge is reviewing all the materials.
“We could have a decision by the end of November,” Mr. Eisert said. “But I’m really hoping it will be decided by the end of the year.”
It the SCHOA/PORA lawsuit succeeds, there will be no discussion as the consolidation will be dissolved, according to Mr. Eisert. However, the matter of rates will then have to be decided as consolidation raise rates in the Sun City and Sun City West districts but decreased them in the five others.
The wastewater consolidation lawsuit will have an effect of ACC decisions going forward on EPCOR’s water rate request when it is finally filed and discussed, according to Mr. Eisert.
“If we lose, the issue will come down to two options, regional or statewide consolidation,” he said.
In the water rate and consolidation request that stalled in January, EPCOR officials sought to consolidate 11 water districts in various areas of the state and equalize their payments. That would mean Sun City and Sun City West customers would see increases in their water bills to go along with the wastewater increases approved in 2018, according to Mr. Eisert.
During the January deliberations on EPCOR’s interim water rate request, Commissioner Justin Olson and Andy Tobin agreed with SCHOA officials and argued that the original rate case had, in their opinion, never been resolved and should be decided. However, Chairman Bob Burns declared that he would not allow the Commission to “go back” to revisit a previous vote. Mr. Burns, Ms. Kennedy and Commissioner Boyd Dunn voted to approve the interim rates.
“Rate design will stay as it was prior to the March 28 approval, but an interim rate surcharge will appear as a separate line item,” Rebecca Stenholm, EPCOR spokeswoman, stated in an April email. “The surcharge will be calculated according to individual usage and district where service is received.”
In the new rate case application ordered by the ACC, EPCOR officials are required to provide updated rates for the districts as they are today, as well as regional consolidation options where districts may be located in the same area, according to Ms. Stenholm’s April email.