TO: Mayor and Town Council
FROM: Andrew Miller, Town Attorney
DATE: October 8, 2020
CONTACT:
Staff Contact Andrew Miller, 480-348-3691
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AGENDA TITLE:
Title
Adoption of Resolution No. 2020- 29 authorizing the Town Attorney to file a Motion to intervene in the EPCOR Rate Case designated as Arizona Corporation Commission (“ACC”) Docket No. WS-01303A-20-0177.
Body
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2020-29 authorizing the Town Attorney for file a Motion to Intervene in the 2020 EPCOR Rate Case.
Background
BACKGROUND:
On June 15, 2020, EPCOR Water Arizona (EPCOR) filed a case with the Arizona Corporation Commission (Rate Case) requesting a rate increase for its Agua Fria, Anthem, Chaparral, Havasu, Mohave, North Mohave, Paradise Valley, Sun City, Sun City West, Tubac, and Willow Valley Water Districts and for consideration of consolidation proposals related to the various water districts, including the Paradise Valley Water District (PV District). The Town of Paradise Valley (“Town”) is a customer and rate payer within EPCOR’s PV District and thus should monitor the filings and proceedings in the Rate Case by filing a motion to intervene in the Rate Case. Filing as an intervenor will permit the Town to file testimony, present its witnesses, cross-examine other witnesses and otherwise take an active participation as a party to the Rate Case, including filing of motions, opening and closing statements and actively monitoring any changes made in the proposed rate structures for the PV District. Most importantly, because the Rate Case includes not just proposals for “stand-alone” rates , but also a number of water district “consolidation” proposals (identified as Scenarios 1 to 4 in the EPCOR Application), the Town should actively participate in the Rate Case to determine the impacts of the proposed rates on the Town and its residents.
In prior rate cases filed by EPCOR and its predecessor, the Arizona-American Water Company, the Town has opposed proposals that would consolidate the PV District with the other physically separate and geographically distant water districts. The reason for opposing consolidation is that due to the large lot sizes in the Town the typical resident of Paradise Valley has an average monthly water usage that is far greater than the average use in all of the other EPCOR water districts; and that the blended rate tiers will almost always have the vast majority of the Town residents paying the higher per gallon rates that are in the top (punitive) tiers of the projected rate structure. Thus, if the PV District rate payers are blended with the other EPCOR districts, then the PV District rate payers will see large rate increases and essentially will be subsidizing the rate payers in the other districts. By way of example, in the notice recently sent by EPCOR to its customers, a typical Paradise Valley residential rate payer with a 1” meter size and an average water usage of 51,778 gallons per month would see a $34.22 monthly rate increase under a stand-alone scenario, but a $84.99 rate increase if the PV District is consolidated with all of the EPCOR Districts.
To participate in the Rae Case as an intervenor the Council should adopt a resolution that authorizes the Town Attorney to file an application to intervene. Resolution No. 2020-29 (copy attached) would authorize that filing in the current EPCOR Rate Case, as well as directing that the Town Attorney oppose consolidation proposals that would consolidate the PV District with other EPCOR water districts.
ATTACHMENTS:
Draft Resolution No. 2020-29