Did Global Water file more than one rate case?Yes. Global Water owns and operates 16 water and wastewater utilities in the state of Arizona. We filed six (6) rate applications, although we have asked for consolidation into one rate case proceeding. The six (6) utilities involved are:
- Global Water – Palo Verde Utilities Company
- Global Water – Santa Cruz Water Company
- Valencia Water Company – Town Division
- Valencia Water Company – Greater Buckeye Division
- Water Utility of Greater Tonopah
- Willow Valley Water Company
What is the ACC’s role in setting water rates?
The Arizona Corporation Commission (ACC) regulates investor‐owned water companies throughout the state. The ACC monitors service quality, sets rates and inspects utility facilities to ensure they are in proper working order.
Utilities are entitled to recover the expenses associated with operating the utility, plus a reasonable return on infrastructure investments. This money is collected through the rates that customers pay. When a utility requests a rate adjustment from the ACC, several steps are taken. The ACC reviews the company’s financial condition and ensures the company is fulfilling its obligations to customers. The ACC Staff prepares a staff report which lays out staff’s position. A public hearing is held presided over by an Administrative Law Judge. The judge considers the facts as presented in the testimony and prepares a Recommended Opinion and Order (ROO) which advises the Commission of Staff’s recommendations regarding the rate case. The Commission considers the ROO and may accept, modify or reject any or all of recommendations.
What is a rate case?
Over the years a system has been developed to consider rate cases. The utility presents its case, and customers and regulators can challenge the utility’s requests. In Arizona, an independent agency represents customers’ interests, the Residential Utility Consumer Office (www.azruco.gov). RUCO has trained lawyers and accountants who represent customers in rate cases.
Early in the process, a schedule of public hearings is created that allows the public to follow and participate in the process. The utility is required to support its request through testimony and exhibits that must meet rigorously applied standards of evidence. During the hearing process, the utility is subject to cross examination and evidence presented in the proceeding can be challenged on a number of grounds.
The rate case process involves the following players:
- the utility;
- members of the public, including local government, public interest groups and
other organizations and individuals;
- RUCO gets involved in certain cases, and
- the Arizona Corporation Commission Staff.
For more information, visit Anatomy of a Rate Case on the ACC website.
Why is Global Water asking for a rate increase?
One of the major reasons is that the rates for the companies in this rate case were established eight to 10 years ago. Since then, many of our costs have increased dramatically. In addition, Global Water has built significant amounts of infrastructure to service these regions. In Maricopa we have built over $200 million worth of water, wastewater and recycled water infrastructure.
The timing of our proposed rate increases is not ideal. We are in the midst of a severe recession and an unprecedented real estate market collapse and our customers are suffering. But we have to ensure that our utilities remain financially stable so that they can continue to provide quality service. Even though we are seeking considerable rate increases, we have also proposed several significant steps to help reduce the rate increase – steps which allow the consumer the ability to control their own costs.
Has Global asked for emergency or interim rate relief?
No.
How much more will I be paying for my water and/or wastewater service?
The amount will vary depending on your meter size and usage. The ACC will have the final word in determining the amount of the rate increase, if any, that is approved.
When will the rate increase take effect?
The rate case process usually takes about one year. We expect any increase would become effective no sooner than February 2010.
What is the process for making a rate change?
Global Water started the process by filing a rate application with the ACC. The ACC staff has determined that the application has met the ACC’s filing requirements. The ACC staff thoroughly reviews the application and may ask Global to provide additional information. A public hearing will be held before an Administrative Law Judge. Global Water will submit testimony supporting the rate case, and the ACC staff will submit testimony on the findings of their review. The Judge will write a recommended order for the five Commissioners to consider. The Commissioners can choose to accept the order, modify the order or reject the order. New rates, if approved, would go into effect once the Commissioners render a decision. This process typically takes 12-18 months from start to finish.
The proposed rate change seems like a big increase. How does it compare to other utility company increases?
The ACC has jurisdiction over the service and rates of all public service utilities in Arizona. The ACC staff does an extensive review and audits the process to ensure that all approved rate increases are required to meet the needs of the customers and the utility company.
How can I get additional questions answered?
There will be an official public comment period but we welcome your questions and comments at any time. You can submit questions by email to ratecase@gwresources.com. |
RATE CASE
