EPCOR interim rate request before regulators Tuesday

February 19, 2019

BULLHEAD CITY — The Arizona Corporation Commission is allowing EPCOR Water Arizona’s application for interim rates to move forward, setting the stage for today’s public hearing in Phoenix.

The Residential Utility Consumer Office had raised questions about the legal standing of EPCOR’s emergency rate request and the ACC’s authority to rule on it. But in a filing submitted Friday by the ACC, staff attorney Naomi E. Davis said that ACC staff concluded the application for the interim rates met a broad definition of “emergency” and that the ACC and EPCOR were following the proper procedures to place the request on the docket.

RUCO, along with several other parties involved in the rate dispute, including the City of Bullhead City, argued that EPCOR’s interim rate request did not meet the definition of “emergency.” But in its written response, EPCOR noted, “It is well settled under Arizona law that a public service corporation has the right to earn a reasonable return on its investment and to recover prudently incurred costs of providing service to its customers. The parties opposing the company’s application argue that the circumstances of this case do not merit interim rates because there has not been a demonstration that there is an ‘emergency.’ This argument ignores the fact that the Arizona courts, the Arizona Attorney General, the Arizona Legislature, and the commission (under its own rules) have each recognized that interim rates are appropriate when, as here, the commission has not processed a rate request within the time clock requirements or within a reasonable period of time. Specifically, under the commission’s own rules, if the commission does not process a company’s rate filing within the required timeframe, interim rates are the appropriate remedy.”

The corporation commission, by a 2-2 vote on Jan. 25, squelched EPCOR’s original rate increase and consolidation proposals. EPCOR argued that the ruling came well after what it considered a Dec. 6 deadline for a decision on

those proposals. ACC staff, in Davis’ filing, apparently agreed, citing an Arizona Attorney General’s ruling in an unrelated case that “the inability of the commission to grant permanent rate relief within a reasonable time ... would be grounds for granting interim relief.”

The public hearing, at 10 a.m. today in Phoenix, is the next step as the ACC considers EPCOR’s interim rate request — filed almost immediately after the Jan. 25 denial.

Bullhead City Mayor Tom Brady and City Councilmember Annette Wegmann are expected to testify today on behalf of Bullhead City in its opposition to the rate increase request. Also planning to attend is Al Scigliano, chairman of a locally formed H2O Committee comprised of concerned Bullhead City citizens.

“I’m not really a great public speaker,” said Scigliano, a member of the Bullhead City Council in the city’s early days, who has devoted much of his time and energy into fighting the rate increase — and other issues he said are involved with Bullhead City’s water system.

“We own the lines,” Scigliano said, suggesting that he has seen no indication of a utility company purchasing the water system — or at least part of it — that predates the city’s incorporation in 1984. At least part of the water system was put in by an improvement district, paid for by residents within that district.

“Not only am I going to fight the rate increase, I’m going to ask for a rate reduction in my presentation,” said Scigliano, who was invited by the ACC to speak. “If they don’t own the distribution system, it’s not worth $100 million. It’s not worth $34 million.”