On April 2, 2007, Arizona-American Water Company, Inc. (Arizona-American" or "Company") filed an application with the Arizona Corporation Commission ("ACC" or "Commission") requesting approval of a determination of the current fair value of the Company's utility plant and property; and for increases in rates and charges based thereon for the Company's Sun City Water District. Included in the Company's application was a proposal to implement a surcharge to fund future fire-flow infrastructure improvements.
During the proceeding RUCO opposed the implementation of the proposed fire-flow surcharge arguing that the fire-flow improvements were not required under Commission rules and therefore were discretionary in nature. RUCO also opposed the manner in which the surcharge would be implemented.
On Wednesday, May 7, 2008, the five sitting ACC Commissioners adopted (by a vote of 5-0) an amended recommended opinion and order which rejected an Administrative Law Judge's recommendation to adopt the fire-flow cost recovery mechanism that was proposed by Arizona-American.
On Wednesday, June 4, 2008, the attorney for the Town of Youngtown filed an application seeking a rehearing on the fire flow cost recovery mechanism which was rejected by the Commission in Decision No. 70351. The Commission had twenty days to consider the Town of Youngtown’s request and to act on it. No action was taken during the twenty day period by the Commission and the decision stood as voted on. The Town of Youngtown subsequently appealed the Commission's final decision in the Arizona Court of Appeals.
On Monday, December 1, 2008, RUCO filed its responsive brief with the Court of Appeals Division One.
On Tuesday, June 16, 2009, attorneys for the Town of Youngtown, the ACC and RUCO gave oral arguments in the Court of Appeals presenting their respective cases.
On Friday, June 26, 2009, the Arizona Court of Appeals affirmed the Arizona Corporation Commission's decision to reject a fire-flow surcharge for Arizona-American Water Company's Sun City Water District.