Phoenix, Ariz. – The Arizona Corporation Commission voted 4-1, with Commissioner Tovar in opposition, on Thursday, October 17, 2024, to approve a settlement agreement reached between ACC Staff, the Arizona Residential Utility Consumer Office (RUCO), and Foothills Water & Sewer, LLC.  A settlement is when all parties are able to agree on the terms of the rate case, instead of proceeding to an expensive and time consuming fully litigated rate case.

Foothills Water & Sewer, LLC provides water and wastewater services for approximately 27,000 residents in Yuma County.  After the utility acquired the systems in 2022, it invested $19 million to make repairs and improvements to update the deteriorated infrastructure in order to bring the systems up to modern and to meet standards.  The agreement that the Commission approved also allows Foothills to recover an additional $7 million dollar investment currently being undertaken to upgrade the Section 14 plant.  These upgrades will assist the Company with gaining further compliance with environmental regulations and address odor issues in the area.  This investment will be recovered through a surcharge once the plant is fully online, that includes several ratepayer protections, such as a cap of $6.4 million, subject to an earnings test, inclusive of an efficiency surcharge of 5%, and a sunset of 5 years, all of which will save ratepayers money.

All parties agreed that the terms of the rate increase and surcharge were reasonable and in the public interest.  For Foothills Water customers that use an average of 3,490 gallons a month, they can expect to pay around gallons a month, they can expect to pay around $21.91.  Foothills Sewer customers will see a nearly 61% increase, with the average monthly bill increasing by $26.95 to $82.90 a month, with an estimated surcharge of $6.60 for the Section 14 plant once completed. The last wastewater rate increase was in 2013.

“The customers have received a better deal than they would’ve gotten, otherwise,” said Chairman Jim O’Connor, who applauded the parties for reaching the settlement agreement.

“There are a lot of things in this settlement for the ratepayer,” said Dan Pozefsky, RUCO’s chief counsel, during the Special Open Meeting.  RUCO would normally oppose such an increase, however in this case, “the company will have the necessary tools moving forward and ratepayers will be getting good value for their buck.”

The new rates will go into effect November 1, 2024.

All documents related to this case can be found in the ACC’s eDocket system under docket number WS-21182A-23-0292.