Corporation commissioner publishes EPCOR rate case dissent

April 15, 2019

PHOENIX — One of the two Arizona Corporation Commissioners who voted against EPCOR Water Arizona’s interim rate request has released to the public the dissent letter he filed with the commission last week.

Justin Olson was part of the minority in the 3-2 vote last month that approved EPCOR’s request for interim rates — with significant increases for most users — after the commission previously deadlocked 2-2 with one abstention when considering EPCOR’s original rate increase and consolidation request.

“I respectfully dissent,” Olson wrote in a letter filed with the ACC on April 9. “I am disappointed with both the procedure that resulted in interim rates in this case and the commission’s failure to address important ratemaking principles that were raised in the ... case.

“In my mind, this was an abuse of our process. The commission should not have moved the case into the interim rate process.”

That view was shared by Bullhead City officials — and several other parties affected by the rate increase. The city, in its opposition, argued that EPCOR was not facing an impending financial emergency to warrant an interim rate case to be considered.

Olson and Andy Tobin voted against the interim rates while commissioners Bob Burns, Boyd Dunn and Sandra Kennedy voted in favor of it. Kennedy abstained in the vote on the original rate request in January.

EPCOR Water Arizona operates 11 water districts in the state, including four in Mohave County and two that affect Bullhead City residents — the Mohave and North Mohave districts with a combined 18,000 customer connections. Statewide, EPCOR has about 133,000 water connections in Arizona. The company is a subsidiary of EPCOR Water USA, which is owned by EPCOR Utilities, Inc., of Edmonton, Alberta, Canada. The city of Edmonton is the lone EPCOR shareholder.

Olson said he filed his letter of dissent — both explaining his no vote and criticizing the board for its ultimate decision — beause he felt “this increase was not just and reasonable.”

“I am disappointed that the commission was not able to address the revenue requirement in a principled way that could have avoided the rate shock that many customers will experience as a result of this case.”

Under the interim rate approval, EPCOR residential customers in the Mohave District, which includes most of Bullhead City, will see a 26.63% increase, translating to an increase of about $7 a month on the average bill. In the North Mohave District, the rate increase is 34.25%, translating into nearly a $9 hike in the average monthly water bill.

“We don’t understand why EPCOR is getting such an outrageous increase,” Bullhead City Mayor Tom Brady said of the interim rate request and approval. “It’s not the American way. ... Common people are going to be hurt by these increases.”

Brady has said the city will move forward in gathering information about possibly taking over EPCOR’s Bullhead City assets — through a purchase or condemnation, calling the later option “a hostile takeover.”

Any effort by the city to acquire EPCOR’s assets would have to be approved by city voters.

“We expect our voters will wholeheartedly support our efforts to take over our water company,” Brady said two weeks ago.