By Staff Reporter |
A retirement community in Eloy had its water rates raised significantly through a recent Arizona Corporation Commission (ACC) vote.
The ACC approved the rate increases narrowly, 3-2, during its meeting on Wednesday. Commissioners Kevin Thompson and Lea Marquez Peterson voted against the rate increases.
Marquez Peterson said the utility companies should have done more to conduct public outreach prior to engaging in the rate increase process.
“We received many public comments concerning the dramatic rate increase though an increase was certainly expected from a utility who hadn’t filed a rate case in over 25 years. I believe that more could have been done to promote gradualism in the sewer rate case,” said Marquez Peterson.
Picacho Water and Picacho Sewer Company serve the retirement community Robson Ranch, located south of Casa Grande. The community has historically enjoyed low water and sewer rates due mainly to subsidization from the developer behind the community, Robson Companies. The developer absorbed the cost of increased expenses rather than pass them onto the residents.
The rate increases would result in increases of just shy of $7 for water and $65 for sewer, for a combined increase of about $76. No rate changes have occurred since the 1990s. For years, residents paid an average of about $30 per month for water and $42 per month for sewer services.
ACC declined to impose a phased increase of rates.
Commissioner Thompson said that was where the rate increase plan lost his vote.
“For decades, the developer chose to operate the water utility at a loss. No one disputes that the new owner is entitled to recover lost revenues and earn a reasonable profit on those investments,” said Thompson. “But rate increases should adhere to principles of gradualism, and as a regulator, I felt I had a duty to advocate for a resolution that strikes an appropriate balance between all parties and not subject these ratepayers to the consequences of business decisions that were no fault of their own.”
The decision to adjust utility rates after nearly 30 years came after another company, JW Water, acquired both companies from Robson Companies in 2024.
Robson Ranch residents spoke out against the rate increases during Wednesday’s meeting. They accused JW Water of seeking to maximize shareholder return.
The residents also blamed Robson Companies for covering increased expenses rather than passing the cost along to the customers. Residents said they had no knowledge their rates were being subsidized all those years; they said low rates were marketed as a perk of buying within the community.
Jay Shapiro, speaking on behalf of Picacho Water and Picacho Sewer during the meeting, said the rate case was “difficult for everybody involved” and that no one would be happy with the final results.
Shapiro denied exploitation of customers. He argued the longstanding rates were no longer recovering the cost of service. He said the rates were “just and reasonable,” and not a result of “price gouging” to benefit foreign investors. Shapiro accused critics of the rate increases of conducting a smear campaign.
“Rate shock was inevitable — rate shock sure sucks,” said Shapiro. “It’s an unintended consequence of some rate filings.”
Chairman Nick Myers agreed with JW Water that these rate increases were a necessity for services provided, not a means of making up for lost profits.
“Though I personally would prefer not to approve rate increases, we have a constitutional duty as Commissioners to set just and reasonable rates,” said Myers.
Vice Chair Rachel Walden concurred.
“JW Water is NOT recovering revenue losses over the course of the past 25+ years, nor are they recovering the purchase price of the utilities,” said Walden. “This rate case is ONLY about setting rates to cover the cost of service. I put forth a verbal amendment that was supported in full to ensure that future growth will pay for itself.”
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