During the doldrums of summer, while many Arizonans were enjoying vacation travels, the Arizona Corporation Commission enacted a historic reform that will help insure that all Arizonans have a secure and affordable water future. The entire commission supported the implementation of a new rate-making mechanism called the System Improvement Benefit mechanism (SIB) that will address Arizona’s severe water infrastructure needs without causing rate shock for customers.

Arizona is served by more than 400 private water companies, many of which have been in existence since the early days of statehood. The American Water Works Association estimates that there is more than $30 million of needed major infrastructure replacement in the West, much of which is located in Arizona. That does not even include the minor distribution plant that is so vital to the viability of small companies in rural parts of our state.

That same study points out that in Tucson alone, anticipated infrastructure replacement and repair costs per household in 2015 is almost $100,000.

Reliable and affordable water delivery is obviously vital to our state’s existence and the Corporation Commission spends the majority of its time dealing with water company issues. That might surprise many people given the current focus in the media on the energy issues before the commission.

Small rural areas of Arizona are greatly impacted by infrastructure needs given the fact that people are spread out and there are more miles per customer of plant that has to be maintained. Many of these small companies serve as few as 50 to 75 customers, leaving very little margin to operate.

Water utilities are natural monopolies because of the large investment required to put pipe networks in the ground. This means it is virtually impossible to have more than one provider of water service within a given area. Many of Arizona’s private water companies have evolved over time as early owners of a well gradually agreed to provide delivery of water to their neighbors as new residents came to their area. Over time, a neighborly gesture of providing water service resulted in the creation of a water utility.

Water utility status creates great responsibility. After all, this is a utility that is delivering a commodity that we are all ingesting.

Insuring that the quality of the drinking water we are receiving is a key requirement for a water provider. Having repaired and updated infrastructure is a necessity for that requirement to be met.

Under the new System Improvement Benefit approach, water companies will be required to provide updates on infrastructure improvements and water company customers will get the financial benefit on their bills of an Efficiency Credit.

Water rates and infrastructure needs are not usually the topic at neighborhood block parties or the family dinner table. Arizona residents have the expectation that when they turn on the tap or the garden hose safe water will appear. It is an expectation that the Corporation Commission does not take lightly, which is why this recent decision is so vital to the success of Arizona’s future water deliveries.

Not only can Arizonans rely on the fact that water will continue to arrive safely and continually, they also now will know that they will not experience sticker shock on their bills for the privilege of receiving the necessary commodity of water.