Bruce Phillips of Waddell speaks before the Arizona Corporation Commission Wednesday, saying it was unfair for Arizona American Water Co. to construct a multi-million dollar water treatment facility during the economic downturn and force customers to pay off the facility’s debt.

Zack Colick/Daily News-Sun

An administrative law judge overseeing the Arizona American Water rate case kicked off proceedings Wednesday by scolding company officials and their legal team for not communicating well or in a timely manner with customers in Surprise and other communities.

Administrative Law Judge Teena Jibilian’s tone was congenial but serious, and Jibilian asked that Arizona American improve its mailing system by ensuring notices are sent through direct mail in order for customers to realize they could be paying an extra $30 per month under the company’s proposal.

Opponents of the hike say they believe Arizona American is “overreaching” in its proposed 81 percent increase and, on top of that, many customers have come forward saying they were not properly informed by mail about the pending rate case for the Agua Fria district.

Because of the miscommunication, the period to intervene was recently extended to Wednesday, allowing customers, homeowners associations and municipalities to decide whether to lend their expertise and opinion about how increased rates would affect their pocketbooks.

In a special meeting Tuesday, the Surprise City Council voted unanimously to allow the City Attorney’s Office to intervene on the city’s behalf. Council members approved an expenditure limit not to exceed $10,000 to hire an outside consultant, who will assist in the intervention.

John Thornton of Thornton Financial Consulting, a firm specializing in utility finance and rates, will represent Surprise. Thornton, who previously worked for the ACC, intervened on behalf of Paradise Valley during a recent Arizona American rate case that affected more than 5,000 town residents.

Testimony wasn’t heard Wednesday afternoon. Instead, the roughly 30-minute hearing at ACC headquarters in downtown Phoenix was a chance for the players on each side to introduce themselves, as well as give about a half dozen intervenors the opportunity to express their views on the proposed rate hike.

Surprise mayoral candidate Sharon Wolcott, who urged the city to intervene months ago and has since joined forces with the Sun City Grand homeowners association, said Surprise customers could be adversely affected in a number of ways.

Many residents are part of HOAs, and Wolcott said they could see their monthly assessments skyrocket if their community must bear the burden of increased monthly costs.

In addition, Surprise hooks up to Arizona American, as do many businesses throughout the community, which Wolcott said could be passed on to residents in the form of higher taxes and restaurant or service bills.

“By my count, Surprise residents will pay this rate hike at least four times,” she said. “If (local businesses’) bills go up, so will prices on everything from produce at the grocery store to the new car on the dealership parking lot.”

Bruce Phillips, a Clearwater Hills resident in unincorporated Waddell, said Arizona American has to change its business model to reflect the struggles of the many struggling Arizonans whose 401k accounts are dwindling and who have not seen cost of living increases in years.

Phillips said it was unwise for Arizona American to construct the White Tanks Regional Water Treatment Facility, which opened in December 2009, during a time of economic distress for many. Phillips believes the company is trying to unjustly dump the facility’s costs on customers.

“The company’s foresight was short,” he said.

Still, Wolcott said customers’ drinking water needs to be clean and safe – and understands that it takes money to provide such a service.

“For that, there is a cost,” she said. “But drinking water also must be priced within reach of most household budgets.”

Zach Colick can be reached at 623-876-2522 or

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