EPCOR

EPCOR Arizona is proposing to raise the rates for Brooke Water customers if the Arizona Corporation Commission approves their purchase of the water utility.

A full-page notice in the Oct. 23 Parker Pioneer spoke of proposed rate increases for Brooke Water LLC, a privately-owned water system located upriver from Parker. Rebecca Stenholm, a spokesperson for EPCOR Arizona, said there are actually two rate increases in the notice. The first is what EPCOR wants to charge Brooke customers if their proposed acquisition of Brooke is approved by the Arizona Corporation Committee. The second is a proposed rate increase from Brooke that was submitted prior to EPCOR filing to acquire Brooke.

Stenholm acknowledged the legal language that was required in the notice made it “clear as mud” to most readers.

Under EPCOR’s proposal, which Stenholm said was filed as part of the acquisition process, Brooke’s rates would be increased by 40.2 percent over the next two years. The average customer with a 5/8-inch by ¾-inch meter who uses 2,567 gallons would see his or her monthly rate increase from $26.99 to $37.84.

In Brooke’s proposal, the average residential customer with a 5/8-inch by ¾-inch meter who uses 2,567 gallons per month would see their rate increases from $26.99 to $28.45, an increase of 5.41 percent. Stenholm said Brooke Water has been asked to update their proposal.

Stenholm said EPCOR plans to integrate Brooke with their water district in Lake Havasu City, and these were the rates their Lake Havasu customers were paying. She said substantial capital investments are needed for Brooke Water, and they did not want their Lake Havasu customers subsidizing these investments in Parker.

There have been published reports in recent years of Brooke’s aging and deteriorating infrastructure. Stenholm said aging infrastructure is an issue for utilities all across the nation.

Stenholm said the Corporation Commission is still working on EPCOR’s request to acquire Brooke Water. She said they do not expect a decision by the end of 2019, and added they may have a decision in the first quarter of 2020.

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.

Background

Brooke Water 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. Service was not fully restored until Aug. 24. An Arizona Department of Environmental Quality engineer said Aug. 26 the water was safe to drink.

The Corporation Commission wasn’t informed of the outage until two days after it started. At a special meeting Aug. 29, they 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. Customers often could not reach anyone at the company when they had issues, and, when they did reach someone, they were treated rudely.

In May 2019, EPCOR reached an agreement with Brooke Water to acquire the system. The acquisition is still pending before the Arizona Corporation Commission. This will be EPCOR’s eighth acquisition in Arizona.

“EPCOR will bring the right blend of expertise, long-term commitment, and customer-focused operations to Brooke customers,” said Brooke Water Manager Tom Jamieson in a press release at the time. “We’re very pleased to be entering into this ownership transition process.”

In their application, EPCOR stated Brooke Water met the qualifications for a non-viable utility.

A movement is underway in Bullhead City to acquire EPCOR’s system there. City Manager Toby Cotter told the Pioneer that EPCOR is an excellent operator and they provide a high quality of customer service. The problem is the rates they charge. He said that, if EPCOR acquires Brooke Water, Brooke customers should expect their rates to “go through the roof.”

 

EPCOR Arizona is a subsidiary of EPCOR Water USA, which is owned by EPCOR Utilities, Inc. of Edmonton, Alberta, Canada. They operate 11 water districts in Arizona, with 133,000 water connections.

 

 

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