Payson Water Co. malcontents air grievances

Intervenors to Arizona Corporation

Commission, “Do your job!”

Provide rates that are just and reasonable

to both the company and the customers 

Phoenix, Ariz. – April 4, 2014 – 

In what has turned out to be a long and grueling water utility rate case, Intervenors in the Payson Water Company rate case say their countless hours of research, investigating, writing, filing, testifying and cross-examining witnesses at the Phase 2 hearing has apparently had little impact in the case.  In the ACC's Closing Brief filed on March 10, 2014, the ACC Staff recommended new rates that would increase by 60% the average residential water bill for 3,000 gallons and would double or even triple the monthly water bill for customers using higher amounts of water. 

The ACC approved a pipeline project in Phase 1 of the case without granting any customers intervention in the process, as delivery of the Public Notice arrived too late for motions for intervention to be filed in Phase 1.  Customer intervention in the process may have exposed some of the inaccurate and misleading data provided by the Company that was used to advance the expedited approval of the pipeline project. 

An Intervenor in a rate case is defined, “Persons, other than the original parties to the proceedings, who are directly and substantially affected by the proceedings, shall secure an order from the Commission or presiding officer granting leave to intervene before being allowed to participate.  Intervenors are treated in the same manner as parties and are given the same procedural rights.” 

In Phase 2, seven customers were granted Intervenor status, representing 6 of the 8 communities served by Payson Water Company, which includes Mesa del Caballo, East Verde Park, Flowing Springs, Whispering Pines, Geronimo Estates/Elusive Acres, Mead Ranch, Deer Creek Village and Gisela/Tonto Creek Shores. 

The Intervenors advanced arguments against exceedingly high increases in expenses, large payments of dividends to the former owner and irresponsible levels of water hauling exercises excused by neglected water systems.  They argued that the Company's interests have failed to be compatible with the public interest and with the proper performance of their duties as a public service Corporation. 

“Payson Water Company appears to have inflated their cost of operation in order to receive a higher rate.  They have also filed inaccurate Annual Reports that are not inspected by the ACC during a regulatory audit.  This has harmed the customers and the ACC has responded by looking the other way and not taking action" says Sue Nee, Mead Ranch Intervenor. 

Kathleen Reidhead, Intervenor from Deer Creek Village, says "In my view, proper oversight of Payson Water Company has not been conducted by the ACC in the past and I'm seeking assurances that more thorough oversight will be conducted in the future.  Customers should be an integral and valued part of the process." 

In addition, William Sheppard, Intervenor from Geronimo Estates adds, "Everyone knows there has not been a rate increase for over 12 years.  But that is not the fault of the ratepayers.  It is the fault of the Company or those who have owned the Company in the past.  Why should the ratepayers have to pay astronomical increases to make up for the fact that there has not been an increase in years?  Any increases should be gradual and phased in over time.” 

J. Stephen Gehring, Intervenor from Mesa del Caballo says, "The rate increase is outrageously high and we shouldn't be penalized for the previous owner's neglect of maintenance and refusal to improve and repair the systems by drilling 2 new wells at approximately $56,000 complete.  Instead, the previous owner opted to create an artificial emergency and haul water in a huge consumer fraud to make profits for the Company.  I wouldn't object to a reasonable rate increase, but the inverted tier rate is totally unreasonable.  I am looking at $105-$115/month water bills for water that costs $45/month now.  Throughout all these proceedings, the Company's filings have been riddled with material misrepresentations of facts, especially those made regarding the Zonge Study and Geologist Noel's interpretations of that study.  The ACC tends to err in favor of Companies consistently." 

A. Glynn Ross, Intervenor from Gisela says, "The Corporation Commission has lost vision and purpose of why they were established - to protect consumers and ratepayers." 

Tom Bremer represents the East Verde Park (EVP) community, whose position is that water rate and fee increases should not be allowed without a specific plan and commitment to upgrade the 1950's-era water system, in order to improve reliability and to avoid the need for summer water hauling into EVP.  "As part of the rate case, Payson Water Company proposes to charge the EVP community water hauling fees, restrained only by the ACC's recommended cap of up to $10,000 per year.  A previous request by the Company for water hauling surcharges at EVP was rejected by the ACC, on the basis that hauling fees should only be implemented under emergency conditions", Mr. Bremer says.  "At EVP there continues to be no emergency that causes summer water shortages.  There is only the fact that Payson Water Company has never upgraded the EVP water system to provide adequate water production and storage capacity, as was promised to EVP residents as far back as 2001." 

The Administrative Law Judge in this case, Judge Dwight Nodes, recently scheduled a Public Comment Hearing for Friday, April 11, 2014 at 6pm at the Church of the Nazarene, 200 E. Tyler Parkway, Payson, AZ   85541.  The public is encouraged to attend.  Each person will have the opportunity to speak for 3 minutes to share their concerns with the ACC.