Support grows for Community Water rate hike

TUCSON — Community Water Co. of Green Valley appears likely to get most of its requested 26 percent rate increase by next spring, but key state regulators want a stiffer rate hike than the company has proposed for homeowners who use a lot of water.

During an all-day hearing Wednesday in Tucson, staff of the Arizona Corporation Commission said they agreed with much of the company’s overall revenue request, but wanted a more conservation-oriented rate structure.

The company originally asked for a 33 percent overall increase, then reduced it to 26.58 percent, because electricity expenses were reduced because they received credits for overpayment in the past. ACC staff has recommended the water company get a 26.27 percent increase.

Community Water also wants to hike its evening and weekend call-out rate to a $70 minimum from the current $10 rate, arguing that the low rate encourages customers to call the water company to shut off their water when they should call a plumber.

Staff of the ACC questioned that request closely, and CWC President Arturo Gabald—n admitted the utility had not conducted a formal cost study on the matter, but simply used the cost of calling a plumber in Green Valley as a rule of thumb.

The hearing was held before ACC Administrative Law Judge Belinda Martin, who asked to have briefs summarizing the positions of both sides by Dec. 8. She is expected to issue a Recommended Order and Opinion in 30 to 45 days and the matter could go before the five-member commission in late January or in February, meaning the new rates would go into effect in March.

The original rate request is on the company’s Web site, www.communitywater.com, and follow-up documents are available on the ACC Web site under _E-docket, with the case number 08-0590.

Gabald—n said the major reason for the rate-increase request, in addition to increasing cost of electricity, interest expense, gasoline and retirement contributions, is that the company had to pay to build a large storage facility uphill from customers.

The company now must pay to pump water uphill, but that arrangement will allow it to use a gravity-feed system of supplying water, thus largely solving a past problem of occasional water outages, he said.

Gabald—n said outside the hearing that the company for years used a flat-rate structure that did not penalize heavy water users and in recent years has moved to different rates based on monthly water volume to promote conservation.

However, he said that too great a movement in that direction would make revenues too volatile. In the event of extreme weather conditions, such as an unusually rainy season, customers would use less water for irrigation needs, driving down overall consumption and hurting revenues badly, Gabald—n said.

Martin grilled Gabald—n on conservation measures in general, saying that is a focus of the commissioners. She asked several questions about the company’s proposal to operate a pipeline that would be paid for by the Rosemont Copper mine to get access to Central Arizona Project water at Pima Mine Road.

In other matters, Gabald—n noted that growth in the company’s service area has increased to 4 percent in 2009 despite the national housing slump.

He said water losses peaked at about 9 percent several years ago and now are inching downward toward 7 percent.

He said the company believes high water losses resulted from the relative inaccuracy of large meters used by construction customers and the fact that polyethyline pipes installed in the 1970s were breaking.

The company now has a $150,000 a year budget to replace aging pipes with copper pipes, which have been used exclusively since the early 1990s.

Community Water Co. is a member-owned, non-profit water utility located in Southern Arizona, in unincorporated Pima County and the Town of Sahuarita, serving an average of 2.1 million gallons of water per day to approximately 18,000 people.

The service area is approximately eight square miles, existing roughly between Anamax Road to the north, the Santa Cruz River to the east, Cyprus Sierrita to the west, and Mission Twin Buttes Road to the south.

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