Clearing up the confusion in the case of Brooke Water, EPCOR, and the Arizona Corporation Commission was the goal of a public meeting held Nov. 26 at the La Paz County Boating Safety Building. County District 2 Supervisor Duce Minor organized the meeting so local residents and Brooke Water customers could have a chance to ask questions of the parties involved.
Minor said much of the confusion came from the fact that three separate items were involved here. First, EPCOR and Brooke Water had reached an agreement where EPCOR would purchase Brooke. The second was EPCOR’s proposed rate increase for Brooke Water customers if the purchase is approved by the Arizona Corporation Commission. The third was Brooke Water’s proposed rate increases in case the purchase is not approved.
Brooke has not raised its rates since 1992. EPCOR proposed raising Brooke’s rates by an average of 40.2 percent. Brooke’s revised proposed rate hike is 41.39 percent.
Minor and the other speakers emphasized all of this is dependent on what the Corporation Commission decides to do.
In May 2019, EPCOR reached an agreement to purchase Brooke, which serves approximately 2,100 customers in an area north of Parker known as the “Parker Strip.”
Many of Brooke Water’s problems became public following a major outage that occurred Aug. 21-24, 2016. A failed pressure valve led to five breaks in the lines.
The Arizona Corporation Commission ordered their staff to prepare a report on Brooke. What they found was a system whose lines had been installed more than 50 years earlier and were nearing the end of their useful life. They also found much wear and tear on the storage system. They also found poor customer service on the part of Brooke.
In their application, EPCOR stated Brooke Water met the qualifications for a non-viable utility.
EPCOR’s application to purchase Brooke has not been approved by the Corporation Commission. A company spokesperson, Rebecca Stenholm, said they do not expect a decision on the application before the end of 2019. They’re hoping for a decision early in 2020.
Ray Jones, a consultant for Brooke, said the Corporation Commission began an investigation of Brooke in 2016. By May of 2017, they found Brooke had made significant improvements, and they ordered the company to prepare a rate case. Jones said he was hired to help with the rate case.
In July 2018, Jones said Brooke asked the Corporation Commission to suspend the proceedings against them so they could sell the company. They also hired Pat Giles as Operations Manager.
Jones said Brooke has made $1.2 million in capital investments. However, with the rate case being delayed, they haven’t seen a return on their investment. He added that Brooke is very complex for a small system, with six treatment plants, six systems, and multiple pressure zone
“The system is a lot better than it was in 2016,” Jones said.
Rebecca Stenholm of EPCOR said their focus is providing safe, reliable quality water service to their customers. She said they want to bring Brooke Water into their Lake Havasu City system, and charge the same rates as they charge there.
Stenholm said EPCOR estimates Brooke Water will need $7.5 million in capital investments in the next 10 years. With the aging infrastructure, they don’t want to wait for things to break down before they replace them.
“We want to replace things before they need to be replaced,” she said.
Stenholm said EPCOR’s customer service is locally based, and they will be available 24 hours a day, 7 days a week.
The question was asked if there would be more rate increases from EPCOR on top of the proposed increases. Stenholm replied that rate cases are a complex process, and they may take more than two years.
Minor remarked that it looked like customers would be seeing rate increase no matter if it was EPCOR or Brooke that was running the system. He asked if the rate increases could be spread out over a number of years.
“Folks are really going to get hit by a 40 percent increase,” he said.
Sarah Skaggs, EPCOR’s Customer Care Director, said they have several programs to assist customers with their bills. These include low income programs, programs for military veterans, and programs for families of active military personnel who are deployed.
Someone from the audience asked if EPCOR was a Canadian company. Stenholm said EPCOR USA is a subsidiary of EPCOR Utilities, which is based in Edmonton, Alberta, Canada. However, she said all their U.S. operations are run by Americans.
When asked why bigger users of water pay a higher rate than smaller users, Jones replied this was a way of encouraging water conservation.
La Paz County Assessor Anna Camacho said she received a text message from a taxpayer asking what EPCOR’s plan is to fix things once they have that rate increase.
Frank Metzler, EPCOR Arizona’s Operations Manager, said it was their job to know the system and what needs to be fixed. He said they don’t have a comprehensive plan yet because they don’t have the system.
Many of the comments from the audience were deferred to the Corporation Commission, which will be meeting in Parker Tuesday, Dec. 17 to discuss and hear comments from area residents on the EPCOR-Brooke Water matter. That meeting will be at 6 p.m. at the La Paz County Boating Safety Building.
A hearing on this matter will begin at 10 a.m., Wednesday, Jan. 22, 2020 at the commission’s offices at 1200 W. Washington Street in Phoenix. Written public comments may be sent to Arizona Corporation Commission, Consumer Services Section, 1200 W. Washington Street, Phoenix, Ariz. 85007. They may also be submitted on the commission’s website, www.azcc.gov. Click on “Cases and Open Meetings” and “Make a Public Comment in a Docket.” The docket number is WS-01303A-19-0092 et al.” If you need assistance in making a comment, call 1-800-222-7000.