EPCOR consolidation plans to spring higher Paradise Valley water rates

The seal of the Town of Paradise Valley. (Independent Newsmedia/Arianna Grainey)

Town officials estimate consolidation plans pursued by a private water company will result in higher water rates — estimated to be as much as a 30 percent cost increase — for 84 percent of the estimated 535 water accounts within the Town of Paradise Valley.

EPCOR USA, a private water company within the contiguous borders of the United States, which is owned and operated by the Canadian municipality of Edmonton, provides water service to most town residents as well as the Paradise Valley resort industry.

In both Arizona and New Mexico, EPCOR USA manages nearly 200,000 water connections — a fraction of which have Town of Paradise Valley addresses, Independent archives state.

Within the Town of Paradise Valley, EPCOR has two water plants, eight pump stations and 129 miles of water pipe pumping anywhere from 6 to 18 million gallons of water a day depending on the time of year and typical use of Paradise Valley residents.

However, EPCOR officials have filed an application to increase its utility rates, which is pending at the Arizona Corporation Commission.

As part of its application, EPCOR officials have submitted a request to consolidate among others its Paradise Valley Water District with the other 10 EPCOR water districts it owns in the state.

The other 10 water districts are physically separate from the Paradise Valley District and range as far as Bullhead City in the north to Tubac in the south, town officials say.

Town officials speculate part of the consolidation plan is also an adjustment to how water flow is measured and charged.

“It becomes quite expensive at the level of usage in Paradise Valley,” said Deputy Town Manager Dawn Marie Buckland. “The most expensive tier is over 80,000 gallons per month. For everyone that we have on their system more than 80 percent are over 80,000 gallons a month.”

Ms. Buckland delivered testimony Tuesday, July 17 to the ACC regarding EPCOR consolidation, records show.
EPCOR is proposing reducing from a five-tier system to a three-tier system with new rates appearing as gallons per month:

  • Tier 1 is 0-3,000 gallons per month.
  • Tier 2 is 3,001 – 9,000 gallons per month.
  • Tier 3 is 9,001-plus gallons per month.

Ms. Buckland says a single home in the Town of Paradise Valley, at times, is equivalent to four to seven dwelling units in other communities.

Dawn Marie Buckland

“We started doing that math and realized this was going to be a huge increase for nearly everyone,” she said. “Our biggest concern is really that we are looking at Paradise Valley subsidizing — they should be paying their own way, but they shouldn’t be asked to subsidize the costs of others around the state.”

However, usage will determine increase in water rates, Ms. Buckland says.

If a resident’s average gallons per month of water usage is less than 12,000 GPM, the homeowner would likely have a lesser increase in rates if the Paradise Valley district is consolidated.

Paradise Valley Town Attorney Andrew Miller contends the municipality was not aware of hard facts regarding rates when earlier (year?) this EPCOR officials announced their consolidation plans.

“On the average customer information, EPCOR didn’t provide this data,” he said. “If EPCOR had provided the average PV customer impact up front — instead of the hypothetical average customer for all the districts combined, which is a 7,000 GPM customer — we probably would have been opposing consolidation from the get-go.”

Mr. Miller says the best way to understand impact is to follow the money.

Paradise Valley Town Attorney Andrew Miller. (Independent Newsmedia/Arianna Grainey)

“Doing that, we see the overall impact on PV district customers is a 34.35 percent increase in rates,” he explained.

“That’s computed by comparing the $10,928,928 of stand-alone revenue requested by EPCOR with the $14,683,337 consolidation is approved. That’s the best average impact I can find, but I think it’s still more than 34.35 percent if we could separate the PV customers from the Scottsdale customers in the district.”

Paradise Valley Town Manager Kevin Burke explains consolidation comes down to how to best shoulder the cost of water delivery.

“In general, the pro and con of being a standalone versus consolidation is the number of customers and diversity of treatment and distribution systems that must be operated,” he said.

“For EPCOR’s PV water district, the current condition of the system is pretty good. EPCOR has made substantial investments in the PV well, treatment and distribution system in the last decade. Despite this, the rates are still substantially lower than the proposed rates.”

Mr. Burke says this infrastructure investment juxtaposes the pursuit of consolidation and rate increases.

“This tells us that the other systems that PV would be consolidated with have more substantial needs and the overall consolidated system would have to generate more money to address them,” he explained.

“This means that PV users will be paying for improvements in other systems that it would not have to pay for if it remained alone. So, while self-reliance within a smaller group can be more risky, it better meets the exact needs of the current system.”

The Arizona Corporation Commission will have the final say on the matter, but town officials say they don’t know when that decision will be rendered.

Independent Newsmedia Arizona Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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