(Letter from resident in Cross River, Jnay McDonald) Great letter, Thank you.... To whom it may concern: I have been reading all of the information contained in the AZCCs docket for EPCORs waste water rates. I have noticed that many residents of the Sun Cities are against any kind of rate increases. As a resident of Crossriver, I am sensitive to their concerns. No one likes to endure rate increases, especially those who are just wanting to enjoy their retirement. I would like to draw your attention (and the attention of PORA members) to the following: Full consolidation of all of EPCORs AZ waste water districts offers the best long-term solutions. I realize and understand PORA members concerns over increases in their sewer bill. However, in the long term, ALL customers will benefit. All customers will benefit as full consolidation allows for the ability to make needed capital investments in smaller districts (like Sun City and Sun City West) without imposing burdensome rate increases in the future, as those costs will be spread over the entire, consolidated entity. We in Agua Fria (Corte Bella, Crossriver, Coldwater Ranch, Verrado, and Russell Rach - as well as residents of Anthem) are more than willing to help our neighbors not have to endure the ridiculous rate shock we have had to experience. We do NOT want to see the residents of Sun City and Sun City West have to pay an extravagant rate when their older infrastructures one day need repair or replacing. If Sun City and Sun City West remain in their own exclusive EPCOR districts, this WILL be what those residents will have to face. Over the long term, every EPCOR wastewater district will require needed improvements, and as systems continue to age, these improvements will be costly. Unlike with separate districts, in which each district would be required to pay for the entire cost of an improvement within that district regardless of its cost (and the smaller the customer base in the district, the greater the proportionate increase), consolidation allows for that expense to be spread over a greater number of customers. Although it is true that the physical infrastructure and treatment plants of certain of the wastewater districts are separate from one another, this should not be determinative in setting rates. Other major utilities, including electric utilities (such as APS), natural gas utilities (Southwest Gas) and telephone utilities (such as CenturyLink), have unified tariff structures across Arizona even though they serve many different communities. The same is true for large municipal water and wastewater utilities that serve numerous communities within their municipal boundaries (such as the City of Phoenix). For example, if APS constructs a large facility in Phoenix or Flagstaff, the costs of these facilities, while they may not directly benefit the entire service territory, are spread over the entire customer base. This ultimately benefits all customers as infrastructure ultimately ages in all areas and must be replaced. As noted above, rate consolidation would help address the relative imbalance of district-based capital needs and their relative number of customers. If Sun City and Sun City West remain in their own EPCOR districts, they WILL face disproportionally larger rate increases in the future. Especially since these customers have not faced rate increases in several years, it will one day HAVE to occur. When infrastructure needs improving, that $ will be recovered by the company over a smaller customer base as compared to fully consolidated districts with more customers. Rate consolidation would lessen the rate shock otherwise associated with capital investments made in small districts such as Sun City and Sun City West. Epcor has stated that over the next 5 years, EPCOR expects to spend over $9.3 million dollars on regular capital improvements for the wastewater operations in Sun City and approximately $4.9 million in Sun City West to improve lift stations and pumps, and a major force main replacement. The residents of Sun City and Sun City West WILL be facing rate increases in the very near future. Full consolidation with the rest of AZs EPCOR districts would also increase their rates. However, the rate increases with full consolidation will be MUCH less than what they would experience if they were to remain in their own exclusive districts. It is understandable that the residents of the Sun Cities do not want to have to subsidize other areas. However, the option for full consolidation would benefit ALL customers in the future. Residents of Sun City West will only experience a very small increase (less than $10 per month) with the full consolidation option proposed and will gain MUCH benefit when their infrastructure needs repair/replacement. It is unimaginable what their rates would raise to if they are to remain in their own separate waste water district, but I can pretty much guarantee it would be more than the small amount that is being proposed through full consolidation. As shown in the data provided as a part of EPCORs filing, there is no question that certain districts would benefit in the short term from full consolidation (most of the rest of EPCORs districts separate from Sun City) and others would experience slight rate increases (Sun City and Sun City West). Generally, these differences occur because of the relative size of the customer base in different districts or because the facilities that serve customers in one district are older and therefore cost less when they were installed many years ago, than newer facilities in another district. This, however, provides only a snapshot of the situation at this moment in time. Over a period of years, ALL facilities will need to be replaced or upgraded as they wear out or as new regulations come into effect. When these new facilities are installed, they will inevitably be more expensive than the ones they replace. Over time, districts that have older and less costly plants will see it replaced or expanded with newer and more costly plants. It is inevitable that Sun City and Sun City West will experience rate increases. It would behoove PORA members to get on board with full consolidation to reduce the impact their rates will take in the very near future through infrastructure repair or replacement. I would encourage you to share this information with the members of PORA so that they are fully informed of what is going on. We, the residents of Agua Fria are not trying to increase Sun City or Sun City Wests rates, but rather protect these residents from the same rate shock we have had to endure with the current rate design that is in effect.
Posted on: Tue, 12 Aug 2014 23:48:03 +0000
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