Arizona-American Water Company, Inc. - Paradise Valley District CAP Surcharge

Docket Number
Assigned Staff
D. Pozefsky
W. Rigsby


Case Information:


Arizona Corporation Commission ("ACC" or "Commission") Decision No. 61831, dated July 20, 1999(link is external), established an adjustor mechanism which allows Arizona-American Water Company ("AAWC" or "Company") to recover the Company's ongoing Paradise Valley Water District's Central Arizona Project ("CAP")  costs through a surcharge that is subject to an annual true-up.

The surcharge applies to all customers of the Paradise Valley Water District with the exception of sales for resale customers. For residential customers the surcharge is calculated on a per 1,000 gallon basis in excess of 45,000 gallons of consumption and all levels of consumption for non-residential customers.

In accordance with Decision No. 61831, both ACC Staff and RUCO are responsible for the review and approval of any proposed surcharge changes or true-ups.

Decision No. 71841, dated August 10, 2010(link is external), revised the filing requirements originally established in Decision No. 61831 as a result of AAWC’s failure to file a timely annual revision/update of the CAP surcharge.  Per Decision 71841, AAWC is now required to file an annual revision/update by January 31, of each year with the CAP surcharge becoming effective on the following March 1st.

AAWC filed its revised 2011 CAP surcharge with the ACC on January 28, 2011.

On February 3, 2011, ACC Staff filed a memorandum on the Company’s filing that took issue with AAWC’s request to recover the under-collection of the Company’s prior year surcharge over a one-year period. ACC Staff is instead recommending that the prior year surcharge under-collection be recovered over a three-year period in accordance with Decision No. 71841.

On Friday, February 11, 2011, RUCO filed its annual report on AAWC's revised 2011 surcharge pursuant to Decision No. 61831.  RUCO is recommending that the Commission adopt ACC Staff's recommended CAP surcharge rate of $0.2372 per 1,000 gallons of usage, which is comprised of a rate of $0.0726 per 1,000 gallons to recover the under-collection of AAWC's prior year surcharge over a three-year period, and a rate of $0.1646 per 1,000 gallons to recover current capital and delivery charges.

The five sitting ACC Commissioners voted to approve ACC Staff's recommended 2011 Paradise Valley Water District Central Arizona Project surcharge during the Regular Open Meeting held on Thursday, February 17, 2011.