After months of debate, the Arizona Corporation Commission turned down a proposal for water and wastewater district consolidations that would result in significant rate increases for the residents of Sun City.
Open meeting proceedings that lasted for four hours Tuesday afternoon stretched into a final decision made Wednesday evening from the ACC regarding the proposed rate hikes for the Sun City and Anthem communities and a statewide consolidation of Arizona-American Water’s seven districts.
While much of the two-day discussion centered on the rate increases to Anthem, previous hearings about the issue led to thousands of public comments regarding the consolidation.
Marv Worthen, executive director of the Sun City Taxpayers Association, was one of the few Sun Citians in attendance and said he was pleased with the final outcome.
“As rates cases go, this has been a very interesting one,” Worthen told the commissioners during public comment Tuesday. “I’ve seen Sun City come alive. It comes down to one question: Is it fair?”
If the consolidation had been approved, instead of charging different rates in each community, residents would pay the same rate for the same amount of usage, and since Sun Citians currently pay a lower rate than the other districts, the consolidation would have resulted in substantial rate increases.
“Sun City couldn’t see that, and frankly, I couldn’t see that either,” said Commissioner Gary Pierce during the meeting. “There is a lot more work that needs to be done.”
Earlier this month, administrative law Judge Teena Jibilian issued her recommendation against the consolidation, saying that while the idea is admirable, it was not ideal in this case because of the large disparity of current rates and the jump it would mean for Sun City.
The community of Sun City West also entered comments against the consolidation earlier this year, even though it would have made little difference in the community’s water bill.
While Sun Citians will still see an increase in their water and wastewater bills, that yet-to-be-determined number will be significantly less than it would have been with the consolidation, Worthen said.
“That’s good news and bad news, but truly, we expected a rate increase,” Worthen said.
Anthem, originally in favor of the consolidation, was also facing other rate increases to help pay for the infrastructure purchased by Arizona-American Water from the developer Pulte to serve their community.
If those rates and the consolidation had been approved by the ACC, Sun City and the other districts would have absorbed that new rate hike as well.
After much discussion and a compromise amendment worked out by the company, Anthem legal counsel and ACC staff, the commission’s final decision does levy rate increases on the city of Anthem to pay for the infrastructure, but the increases will be phased in over a three year period at a lower rate of return for the company.
“This has been a long process,” said Arizona-American spokeswoman Joni Jaje McGlothlin. “We’re happy that we reached a conclusion where everyone was working together.”
Wednesday’s unanimous decision also called for one deconsolidation: Arizona-American will begin proceedings on the possible separation of the Anthem/Agua Fria wastewater district, which includes parts of Sun City Grand and Surprise, no later than April.
But the idea of deconsolidation seemed counter-intuitive to ACC Chairman Kristin Mayes, saying that while she would approve it for this case, it seemed “intellectually not consistent,” when the board should be encouraging consolidation for the benefit of customers and water conservation when it makes sense.
Mayes added an amendment to the commission’s decision stating that Arizona-American Water should look at consolidation in future cases, with proposals both including the Sun City district and without it.
“I don’t think it makes any sense to encourage a go-it-alone approach,” Mayes said, even though it will take a lot of work. “This amendment keeps the issue alive, keeps the idea alive, and keeps the company focused on this going forward.”