Water

Times, May 22, 2013

Bob

The Town Council has given staff the go ahead to file with the Arizona Corporation Commission as an intervenor for the water rate increase being proposed by EPCOR/Chaparral City Water Company.

Town Manager Ken Buchanan said the town is a large water user, spending $140,000 annually for water use.

“It would be appropriate for us to be able to speak before the commission,” said Buchanan. “This at least gives us the opportunity to have a seat at the table.”

On April 26, CCWC and parent company EPCOR filed an application with the ACC for a rate increase. The proposed revenue increase is about $3.1 million, equating to a 34.8 percent hike.

In a letter to Mayor Linda Kavanagh and council members, EPCOR Vice President Jim McKee said the current rates are based on a 2006 test year.

“As such, the rates charged do not accurately reflect the current operating costs and necessary infrastructure improvements that have since been incurred,” McKee said.

After analysis CCWC has determined to apply for the $3.141 million in new revenue, according to McKee, resulting in the rate increase of about 35 percent, significantly higher than the company first indicated.

McKee and other EPCOR and CCWC representatives made a presentation to the Town Council in March outlining their intention to file for the rate increase.

At that time it was said the increase was expected to be in the 20 to 30 percent range.

McKee said based on average use for CCWC customers, about 7,800 gallons per month, a residential customer’s monthly bill would increase from about $37.85 under the current rate structure, to about $51.02 with the requested new rate, about $13 more.

The current rate structure was approved when American States Water out of California owned CCWC. That increase went into effect in October 2009, but is based on 2006 as its test year.

The new EPCOR request is based on 2012 as the test year. The company says its proposal is largely an effort to catch up with operating costs that have already increased. The costs of purchasing water, electricity and labor have all increased.

There are also capital costs included such as arsenic meters and other improvements needed to maintain water quality standards required by the federal government.

The next step is for the ACC to review the rate application to determine whether it is sufficient.

McKee said EPCOR will be scheduling additional community meetings after the ACC determines the sufficiency of the application. He said they will also be providing the council with additional information at upcoming meetings.

The ACC will also be scheduling public hearings on the request.

McKee said paper copies of the application for public inspection will be available at Town Hall and the Fountain Hills Library, as well as the CCWC office on Panorama Drive. The application will also be available on the ACC website (azcc.gov) and the water company website (epcor.com).

McKee said EPCOR will continue to keep customers informed during the process and has established an email for questions related to the application. That address is chaparralratecase@epcor.com.

CCWC receives 90 percent of its water as surface water from the Central Arizona Project canal in Scottsdale. The remaining 10 percent is ground water from a well. CCWC has two wells, with just one currently operating.

The company has 13,600 customers in Fountain Hills and delivers three million gallons of water per day during the winter months. That number doubles to six million gallons daily during the summer months.

CCWC also operates one surface water treatment plant and has eight storage tanks and reservoirs and eight pumping stations.