PHOENIX - On Tuesday, May 4, 2021, Liberty Utilities (Black Mountain Sewer) Company, which serves approximately 2,000 residential customers near the Town of Carefree, north of Scottsdale, appeared before the Commission to seek a $8.49 increase to rates, from $79.50 per month to $87.99 per month (an increase of over ten percent) to recover the costs associated with decommissioning the infamous Boulders Wastewater Treatment Plant, which had inconvenienced neighbors, business owners, and visitors to the nearby Boulders Resort and Spa for years with its noxious odors. At least six homeowners’ associations intervened in the matter and asked the Commission to oppose the rate increase and any additional increases associated with, what they believed were, delays in the closure of the plant and an actual budget that “far exceeded” its estimated costs.

“While I was happy to see a resolution to this long-standing battle over the closure of the treatment plant, I ultimately could not support the request from Liberty Utilities to increase rates, given the amount of infrastructure that remained in service and questions regarding the utility’s accounting practices and commingling of funds. 

After closely analyzing the evidence in the case, I found significant discrepancies with the accounting that was used. I also shared concerns with the Residential Utility Consumer Office that Liberty Utilities may have been commingling excess cash with regulated and unregulated affiliates. When I looked at the charts, I thought the dollar amounts looked unusual because Liberty Utilities had removed a 120,000 gallon-per-day wastewater treatment plant from service, yet the paperwork showed a three-fold increase in the value of Liberty Utilities’ property. 

With these questions in mind, I re-ran the numbers and found that Liberty Utilities could continue to earn more than 6 percent rate of return while at the same time reduce rates by approximately $3 per month, from $79.50 per month to $76.36 per month. I prepared the rate decrease as an amendment and offered it for my fellow commissioners’ consideration. 

Unfortunately, a majority of the Commission did not support my amendment—opting instead to accept a deal worked up by Liberty Utilities during the meeting to approve 100 percent of the requested $8.49 rate increase “as-is,” in exchange for a temporary elimination of a few “adjusters” (such as to recover the costs associated with minor expenses, such as property tax, power, and water treatment, etc.). Ultimately, I could not accept the deal and voted “No” on the overall request.

Prior to the final decision, over 500 Scottsdale and Carefree residents submitted written comments that clearly stated their opposition to any rate hike by Liberty Utilities. Furthermore, I was shocked to hear that the utility had failed to inform the Commission and residents that the actual costs to close the plant were significantly higher than estimated. The stories they shared through these comments astounded me. 

The opposition to this rate hike couldn't be any clearer in their sentiments.  They did not want the Arizona Corporation Commission to approve of any rate increase. 

As an elected official, I must always put the interests of Arizona families first. I chose to side with those that dealt with the odors of the wastewater treatment plant for far too many years. I ultimately voted “No” because the rate impact was too high, and the rate of return was still based on prior infrastructure that Liberty Utilities had removed from service.”