Bermuda Water Company, Inc. - Rate Case
On Thursday, December 30, 2010, Bermuda Water Company, Inc. (“Bermuda” or “Company”) filed a rate application(link is external) ("Application") with the Arizona Corporation Commission (“ACC” or “Commission”) seeking a permanent rate increase.
On Monday, January 31, 2011, ACC Staff issued a letter of insufficiency(link is external) informing Bermuda that the Company’s application failed to meet the requirements of A.A.C. R-14-103.B.7. Bermuda subsequently filed an amended application(link is external) on Friday, February 11, 2011.
On Monday, February, 28, 2011, ACC Staff issued a letter of sufficicency(link is external).
Bermuda is a Class B utility that provides water service to approximately 7,632 customers of which 7,219, or 94.6 percent, are residential customers. The Company provides water utility service in the southern portion of Bullhead City, most of Fort Mojave Mesa, and the northern portion of Mohave Valley – areas which are located along the Colorado River in Mohave County, Arizona.
The Company’s present rates and charges were established in Decision No. 61854, dated July 21, 1999, using a test year ending December 31, 1997 (RUCO was an intervenor in the proceeding).
According to Bermuda’s amended application, the Company had adjusted gross revenues of $2,858,966 during the test year ended June 30, 2010 (“Test Year”). Adjusted operating expenses for the same period totaled $2,515,258 resulting in an adjusted operating income of $343,707. This produced a Test Year rate of return of 3.33 percent on a Company-proposed fair value rate base of $10,323,080 (Bermuda has elected to treat its original cost rate base as its fair value rate base in this proceeding).
The Company is requesting an increase in revenues equal to $922,419 or an increase of 34.17 percent over Test Year adjusted revenues. According to the Company’s amended application, Bermuda’s proposed rates will provide it with operating income of $910,083 and an 8.82 percent rate of return on invested capital.
Under Bermuda’s proposed level of gross revenue, the monthly bill for a 5/8 x 3/4 inch meter residential customer, with an average consumption of 9,061 gallons, will increase by $8.02, or 34.20 percent, from $23.44 to $31.46.
On Monday, March 7, 2011, RUCO filed a motion to intervene(link is external) in the matter.
On Wednesday, March 16, 2011, the Administrative Law Judge assigned to hear the Bermuda Water Company, Inc. rate case issued a Procedural Order(link is external) scheduling a procedural conference for 1:00 p.m. on Tuesday, March 22, 2011, at the Arizona Corporation Commission's Phoenix offices at 1200 W. Washington. During the procedural conference the attorney's representing the parties to the case discussed the procedural schedule and the extent of RUCO's participation in the case.
On Thursday, March 24, 2011, the ALJ assigned to the case issued a Procedural Order(link is external)that scheduled the evidentiary hearing on Bermuda's request for 10:00 a.m. on Wednesday, October 26, 2011.
Direct testimony from ACC Staff was filed on Friday, August 26, 2011. Due to security issues, RUCO's direct testimony filing was delayed until Monday, August 29, 2011.
Company rebuttal testimony was filed on Thursday, September 22, 2011.
ACC Staff, RUCO and other intervenors filed surrebuttal testimony on Thursday, October 13, 2011.
A final round of rebuttal testimony from Bermuda was filed on Thursday, October 20, 2011.
Also on Monday, October 24, 2011, the attorney's for ACC Staff, RUCO and Bermuda filed ajoint stipulation(link is external) regarding pre-filed testimony. The joint stipulation reflected the fact that the parties to the case were in agreement on the major issues.
After weighing all of the evidence presented during the proceeding, the ALJ assigned to the case issued a Recommended Opinion and Order(link is external) ("ROO") on Friday, January 13, 2012.
During the Regular Open Meeting conducted on Tuesday, February 14, 2012, the five sitting ACC Commissioners voted to adopt the ALJ's ROO. Bermuda's new rates and charges become effective on Thursday, March 1, 2012.