The Arizona Corporation Commission (ACC) has been holding hearings into the matter of a certificate of necessity (CC&N) for EPCOR Water to construct a water standpipe to serve the Rio Verde Foothills area with a reliable water source.

The Foothills area is west of the Verde Communities in an unincorporated area of Maricopa County. It is not an organized subdivision and has no assured water supply. Long-term drought planning prompted the City of Scottsdale to discontinue standpipe service to water haulers in the area as of Jan. 1, this year.

The Verde Communities has taken a stand before the ACC in opposition to the standpipe application by EPCOR, which is the utility that provides water and wastewater services to the Verdes.

Dick Bush, former RVCA president and lead for the association’s utilities committee provided testimony to the commission for the hearing.

“RVCA strongly opposes the use of any of the wells, water sources, water rights and utility infrastructure of the Rio Verde Water District to serve customers in Rio Verde Foothills,” Bush said. “The Commission should deny EPCOR’s request for consolidation of Rio Verde Foothills Water District with other EPCOR water districts.

“RVCA strongly opposes any rate design which shifts costs from residents of Rio Verde Foothills to any other EPCOR rate payers, including the residents of Rio Verde. Thus, RVCA opposes that portion of (ACC) Staff’s recommendation that consolidation be addressed in a future Sonoran Water District rate case.

“The Commission should order EPCOR to file a Physical Availability Determination, Analysis of Adequate Water Supply, or Analysis of Assured Water Supply, as recommended by (ACC) staffs. This filing should occur before the Commission approves a standpipe CC&N for Rio Verde Foothills. The Commission should order EPCOR to complete a cost-of-service analysis for the Rio Verde Foothills Water District, as recommended by Staffs. Again, RVCA strongly opposes any rate design that shifts costs from residents of Rio Verde Foothills to any other EPCOR rate payers, including residents of Rio Verde.”

In its report to the commissioners ACC staff is recommending approval of the EPCOR standpipe CC&N application with the conditions that it provide staff with a couple of items no later than 18 months after a decision in this proceeding for staff review and approval. Those conditions include “the applicant’s estimated revenue and expenses for the first five years following approval of the application, (and) The estimated value of the applicant’s utility plant in service for the first five years following approval of the application.”

The staff report also recommends, “approval of (EPCOR’s) proposed standpipe rate of $20 per 1,000 gallons, subject to annual true-up.”

Also, staff recommends “consolidation of the proposed standpipe CC&N be considered in the context of a rate case.”

And, “a cost of service analysis be conducted once actual costs of installing and operating the standpipe become known and measurable and for true-up of over or under recovery of the cost of service.”

Staff also concludes that EPCOR is capable of owning and operating the proposed standpipe. However, “Staff cannot make a determination with respect to the consolidation of the (standpipe)with the Sonoran Water District outside the context of a rate case.”

Additionally, Bush testified that, “it is my understanding that the processing of an application for a CC&N with so little information regarding the source of water, the legal right to use that water, the infrastructure that would be constructed, and the cost of that infrastructure is virtually unprecedented in Arizona. I further understand that a ‘standpipe’ CC&N may likewise be unprecedented.

“As a result, it has been very difficult for RVCA to reasonably prepare for the hearing because EPCOR has not put forward any concrete proposals to evaluate. Thus, we are left guessing at what the impacts may be to the Rio Verde community. However, if the Commission elects to approve the CC&N, then it should require EPCOR to hold regular stakeholder meetings in the Rio Verde Community to provide transparent and updated information as EPCOR's plan develops.”

The testimony reported in this story is filed with the ACC case documents.

The ACC has not yet made a decision regarding the EPCOR application.