Residents living in Pinal County's Eagle Crest Ranch could see a 53 percent increase in their monthly water bills if the Arizona Corporation Commission grants Goodman Water Co. its request to raise rates.
The company, which serves roughly 650 customers in Eagle Crest Ranch, is in the early stages of asking for a 53.14 percent increase in water rates for the average customer using about 5,500 gallons of water per month.
Monthly water bills for the average customer could jump from the present rate of $66.73 to $102.19 if the Corporation Commission, which grants or refuses requests for utility rate adjustments in the state, approves Goodman Water's proposed increase.
Officials at Goodman Water say rate increases are necessary to provide the small water utility with financial stability.
"The rate of return they are getting right now is low," said Elaine Nathanson, a spokeswoman for Goodman Water.
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Revenue generated from higher water rates would recover operating expenses and provide the water company with a 10.54 percent return on rate base.
That return would amount to around $291,000 in annual revenues, according to documents filed with the Arizona Corporation Commission.
Adjusted operating expenses have increased by nearly $154,000 since 2005, but revenues have only increased by around $74,000, according to documents.
The nearly 11 percent return would put Goodman Water in line with similar utility companies in the area, Nathanson said.
Residents of Eagle Crest Ranch, about two miles south of Oracle Junction, are stunned by the proposed increases.
"I did expect to pay more for water because I moved to the desert, but I didn't expect to pay outrageously overpriced rates compared to other areas," said Larry Wawrzyniak, who has lived in the development since 2005.
He and the other residents believe they are paying for infrastructure built by Goodman Water to serve more than just the current 650 customers living in Eagle Crest Ranch, which is not built to capacity.
Residents also question why costs to put the infrastructure in place weren't offset by impact fees, but officials at Goodman Water said the Corporation Commission denied the company's request to collect those fees when the homes were being built.
As far as infrastructure goes, Goodman Water said what's currently in place is what's necessary to provide water and fire protection services to the homes in the development, Nathanson said.
There are two water tanks with a combined 930,000-gallon capacity in the development.
Still, homeowners believe they aren't being charged fair water rates as it is and are outraged they could be paying more.
"That's just abuse, but the problem is with the convoluted, complex legal system that we got. It's going to be very difficult for us to win this case," resident Bill Daniels said.
Homeowners also argue that the water company already increased customers' bills by roughly $36, or by around 122 percent, in 2007.
Goodman Water filed its most recent application to increase water rates on Sept. 17.
The commission, which has already responded to the application by asking the water company to address deficiencies in its application, next has to analyze the application and issue a report.
From there, an administrative law judge holds hearings and makes a recommendation that the commission votes on.
The entire process could take up to a year, Nathanson said.
Residents don't plan to back off the water company and have asked the Residential Utility Consumer Office, which represents the interests of residential utility customers in rate-related proceedings, to intervene on their behalf.
They have also approached state legislators.
Goodman Water met with Eagle Crest customers Oct. 20 to explain their decision to ask for rate increases and said they want to continue to involve residents in the process.
