Protesters blast 82 percent rate-hike plan for Surprise water - East Valley Tribune: West Valley

Protesters blast 82 percent rate-hike plan for Surprise water

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Posted: Wednesday, December 7, 2011 7:12 am | Updated: 10:00 am, Wed Dec 7, 2011.

More than 500 Surprise residents attending a protest Tuesday night against Arizona American Water Co.’s 82 percent rate hike request made it clear how they feel with blasts from air horns, shouts of “No” and applause as speaker after speaker denounced the proposed increase.

Surprise resident Robert Stewart called Arizona American’s 82 percent rate hike “outrageous” and a decision he believes could force many families out of Surprise. Customers like Stewart would not only be hit with increased monthly utility bills, but also potentially higher homeowner association fees and increased prices at carwashes, restaurants and golf courses.

“This city could turn into a ghost town with this approval,” Stewart said. “People are close to the edge already with small paychecks. This would be bad for the local economy.”

The rally, organized by the city of Surprise, took place at Surprise Stadium and featured remarks from Mayor Lyn Truitt, Mitzi Mills, executive director of Sun City Grand, and several City Council members and residents.

Truitt commended the crowd for gathering for the roughly 30-minute event in temperatures that were in the mid- to high 40s.

“This 82 percent rate increase is absolutely ridiculous,” Truitt said.

Arizona American is in the midst of petitioning the Arizona Corporation Commission for a water-rate increase for customers in the Agua Fria district, which includes Sun City Grand and other parts of Surprise.

According to its ACC filing, Arizona American seeks to recover $73 million in rate base, of which $64 million is associated with the construction of the White Tanks Regional Water Treatment Facility. The private utility also is seeking a $17.9 million increase in revenue, which would result in an 82 percent increase in water rates for residential ratepayers.

If commissioners approve the proposal in full, Agua Fria district customers could see their monthly bills rise by almost $25. The increase in average residential customer bills, using 7,000 gallons of water a month, would be an estimated $24.62, or about 82 cents a day.

Company officials say the rate hike is necessary to pay off debt tied to the White Tanks facility, which sits on 46 acres near Cactus and Perryville roads, and treats and provides 14 million gallons of surface water every day to Surprise and other surrounding communities.

In addition, officials say, operating costs within the Agua Fria district have increased by more than 37 percent since Arizona American’s last rate case in 2007, largely due to sizeable increases in the cost of labor, fuel, power and purchased water.

Nevertheless, customers have said Arizona American chose to construct its new water treatment facility, which opened in December 2009, at a time when the economy was tanking and the housing market sank. The facility was built on anticipated future West Valley growth that has slowed or never occurred, leaving customers to foot the bill that many call unfair and bad business.

The rate case also comes at a time when Arizona American is selling all company assets to EPCOR Water, a Canadian water provider based in Edmonton. The sale is expected to close in early 2012, and some say Arizona American is trying to increase its value with the rate hike.

Mills, who’s representing Sun City Grand and several HOAs during the hearing in front of the corporation commission, said she’s been sitting across the table with Arizona American’s lawyers during settlement hearings. She couldn’t share what has been taking place behind closed doors, but told residents to keep fighting.

While acknowledging Arizona American’s notification to customers about the rate case “flew under the radar,” Councilman Richard Alton contends the rate hike is “an outrage by any definition” considering high unemployment and foreclosure rates and the most difficult economy in mrecent emory.

“To casually suggest an 82 percent rate hike is a basic necessity shows a callous disregard for the well-being of their customers,” he said. “Say ‘no’ to corporations treating you with such disrespect.”

Jim McManus, Sun City Grand board of director’s president, said customers are dealing with a company that has a monopoly in the marketplace, noting corporation commissioners need to defend customers’ rights and pocketbooks as the private utility faces no local competition.

“A company’s most important asset is its customers,” McManus said. “Arizona American needs to operate with a level of intelligence and regard for its customers.”

Hearings on the Arizona American rate case continue at 9:30 a.m. through Friday at the Arizona Corporation Commission, 1300 W. Washington St., Phoenix. A decision is not expected until early next year.

Visit www.azcc.gov for information about how to contact the five corporation commissioners.

Zach Colick can be reached at 623-876-2522 or zcolick@yourwestvalley.com.

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