Arizona Water Company - 2011 Western Group Rate Case

Docket Number
Assigned Staff
T. Coley
R. Moore
W. Rigsby
M. Wood

Case Information:


On Monday, May  9, 2011, Arizona Water Company ("AWC" or the "Company"), filed an amended application ("Application")1 with the Arizona Corporation Commission ("ACC" or "Commission") requesting a permanent rate increase for the Company's Western Group systems. 

AWC's Western Group is comprised of the Company's Pinal Valley system (which provides service to Casa Grande, Coolidge and Stanfield), the White Tanks system (which serves an area near Buckeye) and the Ajo system.  During the test year ended December 31, 2010, AWC's Western Group Systems provided water service to approximately 30,600 customers.

AWC is seeking a total revenue increase of $4,564,110 or an increase of 24.45 percent over test year revenues.  The revenue increases by system is as follows:



Revenue Increase

Pct. Increase

Pinal Valley $4,509,542 27.21%

White Tank$34,4222.17%

Ajo  $20,1033.95%

In addition to the requested increases in revenue, AWC is also seeking the continuation of the Company's Central Arizona Project ("CAP") Hook-Up Fee and Arsenic Cost Recovery Mechanism ("ACRM") surcharge.  AWC is also requesting that the Commission approve a  Distribution System Improvement Charge ("DSIC") that would allow for recovery of routine plant improvement costs outside of general rate case filings, and an Off-Site Facilities Fee to cover costs of off-site water production, treatment, delivery, storage and pressure facilities for new customers whose water supply requirements make such plant additions necessary.

On Wednesday, June 8, 2011, ACC Staff issued a sufficiency letter(link is external) informing AWC that its amended application meets the requirements of A.A.C. R-14-2-103.

On Wednesday, June 15, 2011, RUCO filed an Application to Intervene(link is external) in the proceeding.

On Tuesday, June 28, 2011, the Administrative Law Judge ("ALJ") assigned to the case issued a Procedural Order(link is external) on the matter.  The Procedural Order established a dual schedule that takes the possibility of a settlement agreement into account.

On Friday, July 15, 2011, the ALJ assigned to the case issued a Procedural Order(link is external)vacating the dates set forth in her prior Procedural Order issued on Tuesday, June 28, 2011. The July 15, 2011 Procedural Order abandons the dual schedule, that takes the possibility of a settlement agreement into account, and resolves scheduling conflicts with other proceedings that were brought to the ALJ's attention by ACC Staff and RUCO.

On Monday, December 5, 2011, the ALJ assigned to the case issued a Procedural Order(link is external)granting ACC Staff's request for an extension of time to file direct testimony on rate design .

On Monday, December 5, 2011, RUCO filed its direct testimony on required revenue, cost of capital and various other issues in the case.

Direct testimony on rate design was filed on Monday, December 12, 2011.

On Friday, January 6, 2011, AWC filed rebuttal testimony on required revenue issues.

On Friday January 13, 2012, AWC filed rebuttal testimony on rate design issues.

On Tuesday, January 24, 2012, ACC Staff filed a notice(link is external) stating that AWC has approached ACC Staff with an interest in engaging in settlement discussions.  In its filing, ACC Staff stated that it believes that a settlement of the case may be possible and would like to engage in settlement discussions with all parties. The notice advised the five sitting ACC Commissioners that ACC Staff will be entering settlement discussions the week of January 30, 2012.  All parties in the matter are invited to attend all settlement discussions.

On Wednesday, January 25, 2012, the Company filed a notice inviting all parties to the case to attend settlement discussions on Tuesday, January 31, 2012 from 9:00 a.m. to 4:00 p.m.

The Administrative Law Judge assigned to the matter heard recommendations from the parties to the case on a revised procedural schedule during a procedural conference conducted on Friday, January 27, 2012.

The first day of settlement talks began as scheduled on Tuesday, January 31, 2012. 

On Tuesday, January 31, 2012, the ALJ issued a Procedural Order(link is external) establishing a two track proceeding based on the outcome of settlement talks. 

After two days of negotiation, the parties to the case came to terms and reached an agreement on Thursday, February 2, 2012.

A copy of the Proposed Settlement Agreement(link is external) ("Agreement")was filed on Wednesday, February 15, 2012. 

Public comment on the matter was heard on Tuesday February 21, 2012 at 1200 W. Washington in Phoenix.

Testimony in support of or opposition to the Agreement was filed on Tuesday, February 21, 2012.

No responsive testimony on the Agreement was filed in the docket.

On Wednesday, February 29, 2012, RUCO filed amended versions of its direct testimony which contained corrections of a non-material nature.

The evidentiary hearing on the Agreement began as scheduled at 9:30 a.m. on Thursday, March 1, 2012 at 1200 W. Washington in Phoenix and concluded before 2:00 p.m. on that same day.  The ALJ assigned to the case provided the parties with the opportunity to make closing statements orally in lieu of written closing legal briefs.

After weighing all of the evidence presented during the proceeding, including comments from concerned ratepayers, the ALJ assigned to the case issued her Recommended Opinion & Order (link is external)("ROO") on Monday, April 9, 2012.  The ROO adopts all of the provisions of the Agreement with the exception of Section 7.4 which deals with the recovery of actual costs associated with the implementation of best management practices ("BMPs"). 

Exceptions to the ROO were due by 4:00 p.m. on Wednesday, April 18, 2012. 

During the Regular Open Meeting held on Tuesday, April 24, 2012, the five sitting ACC Commissioners voted to approve the Proposed Settlement Agreement by a vote of 5-0.


1 Arizona Water Company originally filed an application on December 29, 2010 which ACC Staff found to insufficient.  ACC Staff and the Company subsequently reached an agreement that resulted in an amended filing.