RECREATION CENTERS OF SUN CITY OPPOSES CONSOLIDATION, SIB & ADJUSTER MECHANISMS IN EPCOR WATER & WASTEWATER RATE CASES
– FOR IMMEDIATE RELEASE
EPCOR Water is seeking not only rate increases in water and wastewater as is easily visible and reported in these cases, but they are also seeking significant Adjuster Mechanisms and a System Improvement Benefits (“SIB”) mechanism that will more than double the rate increases proposed over the next 5 years in the water case. Should we be upset with EPCOR Water? No, not necessarily, they are simply another corporation asking for everything they can get. Who deserves our focus, frustration and angst should this water rate increase be granted or this wastewater consolidated are our elected Commissioners on the Arizona Corporate Commission (“ACC”). And given the Commission’s recent decisions, including EPCOR’s recent Fountain Hills case which weighed heavily in favor of EPCOR on most of these same issues, Sun City people have reason to be concerned!
Sun City’s fight over not being consolidated with other water districts is not new; we have been very vocal over our opposition to consolidation for years and we cannot let up now as it will cost Sun City residents an 89% increase in their wastewater, plus the increase costs for RCSC operations as well. While claims may be made that consolidation of our water districts are similar to APS consolidation, this is not true; our water and waste water systems are separate from one another and in most cases cannot even be linked to provide backup support. In addition, consolidation would give EPCOR a blank check to buy up junk water companies and get their entire customer base to pay for it. EPCOR reportedly plans to spend $9.3 million in improvements to Sun City’s wastewater operations in the next 5 years; however, if we are consolidated, Sun City residents will pay $31.8 million for those improvements over the next 5 years.
And that’s just part of the story, Here’s The Rest Of The Story…
While EPCOR Water is requesting a rate increase for Sun City water (in addition to the wastewater increase) of approximately $3.82 per month, they are also asking for another $3.80 per month or so for SIB, commonly referred to as infrastructure. As the General Manager of the Recreation Centers of Sun City who owns and operates 10 wells, I completely understand the need for replacement of infrastructure; however, the problem with SIB is three fold: 1) SIB rewards utility companies for not doing proper maintenance or making necessary improvements; 2) SIB is too broad as it applies to 55% of EPCOR Water’s total investment; and, 3) it does not meaningfully consider reductions in operating costs, synergies as a result of the new infrastructure and other safeguards meant to protect the Sun City customers. Moreover, our consumer advocate, RUCO has sued the Commission claiming the SIB is unconstitutional. Although some scare tactics have been used in the past that without all these additional fees the infrastructure that makes up our systems could fail or be inadequate; the fact is that EPCOR Water is required by law to provide safe and sufficient water to Sun City residents. Sun City residents should disregard the scare tactics and insist that the Commission act in a just and balanced manner!
And that’s still just part of the story, Here’s Even More Of The Story…
Sun City residents need to address consolidation, the SIB/System Improvement Benefits and Adjuster Mechanisms with the Arizona Corporate Commission (ACC) because they are the ones who will determine if this occurs. Basically, adjuster mechanisms allow rates to go up between rate cases as utility companies want to be protected for declining usage and other unfavorable factors. While that may be appropriate to assure that EPCOR has the ability to provide safe and sufficient water and wastewater services to Sun City, the issue is that the rate does not go down if there is an increase in usage, which is totally not fair. In addition, some of the adjuster mechanisms are not appropriate such as tank maintenance expenses or employee health care costs, operating costs controllable by the corporation.
PLEASE let your elected Commissioners to the Arizona Corporate Commission know what you think!
Mail, email and/or call each of the Commissioners as follows:
ACC, Commissioners Wing, 1200 W Washington Street, 2nd Floor, Phoenix AZ 85007
Bob Stump, Chair bstump@azcc.gov 602-542-3935
Gary Pierce gpierce@azcc.gov 602-542-3933
Susan Bitter Smith sbittersmith@azcc.gov 602-542-3625
Brenda Burns bburns@azcc.gov 602-542-0745
Bob Burns rburns@azcc.gov 602-542-3682
Please reference Docket numbers SW-01303A-09-0343 for the wastewater case and WS-01303A-14-0010 for the water case and copy all written correspondence to mailmaster@azcc.gov.
Jan M. Ek, CMCA, PCAM
General Manager
Recreation Centers of Sun City, Inc.
