When you are suddenly without power, it takes just a few minutes to realize the importance of our electrical grid. We get to see what life’s like without lights, A/C, Internet and TV. Important as it is, we shy away from learning details about our infrastructure. We just expect the lights to go on when we flip the switch.
When it comes to our water services, it’s the same. We turn on the faucet. Clean, safe water comes out. We use it for drinking, to cook, to fill our pools, water our lawns and to clean. And, more importantly, our fire departments count on it being there when emergencies arise.
It’s expected. And it should be. But that doesn’t mean it should be taken for granted. Whenever water rates are discussed, the importance of infrastructure — the pipes and plants that bring clean water into our homes and neighborhoods — tends to get lost.
At EPCOR Water, we believe modern, reliable and sustainable drinking water systems are about the future. The question that should be asked is: “Is this what’s best for the future?”
That’s why we think the System Improvement Benefit (SIB) mechanism makes the sense for Fountain Hills, and for Arizona’s regulated water industry. SIB is simply a better way for utilities to finance a community’s infrastructure needs.
When it comes to SIB, we believe it’s important our customers understand the full picture – what it includes, the rigorous review process it undergoes as part of a rate case, the limited infrastructure categories it includes, and the re-approval process before it can be applied to bills.
And all of the SIB-related work needed in Fountain Hills?
It was fully reviewed by the Arizona Corporation Commission, the Residential Utility Consumers Office, the Town of Fountain Hills and others over the course of the past year – as part of a rate case – before it was approved.
The future of water infrastructure in Arizona and across the country is fraught with supply and quality uncertainties from drought, flooding and temperature spikes. It requires a different approach to pricing that allows for constructing new and maintaining existing infrastructure in a way that ensures reliability and avoids delays.
Whether you are talking about water pipes, storm drains or fire flow, infrastructure is the critical backbone of a community. And ensuring it’s there when we need it costs money, something towns and cities know all too well.
What’s best for the future?
That’s a question the Town of Fountain Hills is asking itself right now as it looks at how to pay for the significant work needed to comply with federal guidelines on storm water runoff.
Water pipes. Storm drains. Fire flow. Different infrastructure. Same discussion.
Critics say SIB is a blank check to raise rates. It’s not. SIB makes it possible for utilities to complete vital infrastructure work in only five categories vital to the distribution system – hydrants, meters, mains, valves and service lines. It helps us do this faster, reducing financing costs and speeding up construction timelines.
For customers, SIB means smaller rate increases gradually spread over time, rather than large one-time increases. SIB protects customers – companies can only recover costs for pre-approved projects capped at 5 percent of the approved revenue requirement on an annual basis and customers get a SIB efficiency credit equal to 5 percent of the gross surcharges on a customer’s bill.
It’s easy to shrug off SIB as a ploy against the consumer. But that sounds a lot like the argument that water should be free because it falls from the sky — it just does not have an ounce of sense to it. SIB was designed to help consumers and communities, not burden them with more costs.
SIB looks ahead, not behind. When it comes to water infrastructure, the future is all that matters.
Joe Gysel is president of EPCOR Water USA, the largest private, regulated water company in Arizona and New Mexico, providing water and wastewater service to approximately 198,000 customer connections across 22 communities and seven counties.
