Chaparral City Water Company was acquired by EPCOR USA in 2011, and the company is currently in the process of seeking its first rate increase since that acquisition.

EPCOR USA Vice President for Corporate Services Jim McKee spoke to a handful of citizens at a Sept. 25 open house, and he will make his presentation to the Town Council at its regular session Thursday.

McKee said CCWC has quite a bit of catch up to do financially since the last rate increase went into effect in 2009. That increase was based on a “test year” of 2006.

The new rate proposal is based on 2012 costs, and McKee said much has happened during those six years, including $15 million in infrastructure improvements.

EPCOR is asking the Arizona Corporation Commission to approve rates to provide a revenue increase of $3.1 million annually.

McKee said the money is needed for operations, infrastructure, CAP costs (CCWC purchases most of its water from the Central Arizona Project).

It would also provide for $300,000 annually for storage facility maintenance, something McKee said has been neglected in the past that could have potentially a major impact on delivery and quality of water.

Funding is also needed to offset declining customer water use. McKee said water rates are determined up front based on past customer use, in this case actual 2006 water use, and declining demand and more efficient water-using appliances have had an impact on revenue.

There is also a significant amount of infrastructure upgrade that needs to be done, according to McKee. He said the 40-year-old system has suffered neglect and projects such as an ongoing effort to upgrade water meters in the community are necessary.

McKee said they would be upgrading deficient infrastructure materials such as replacing poly pipe with copper.

McKee said the $3.1 million annual increase would break down at $900,000 revenue from the base rate, $600,000 for return on capital, $500,000 to offset decline in water use, $700,000 in increased operations costs and $400,000 for depreciation.

McKee said they believe the rate proposal better manages and forecasts future needs and would therefore extend the period before a new rate increase is needed.

He cited a number of projects already begun that would achieve that management end. Those include arsenic removal from a well, structural improvements to a reservoir, a planning study, telephone upgrades to improve customer service, distribution improvements, upgrading the filter at the Shea Boulevard treatment plant, new tools, equipment and vehicles and recurring work on distribution and facilities.

CCWC estimates that customers with a ¾-inch meter and using a monthly median of 12,000 gallons of water are paying $52.02. The new rate would increase that by $18.10.

For those with a 1-inch meter and a current monthly median usage of 16,000 gallons the comparison is $74.86 with an increase of $26.09.

November 1 is the deadline for anyone wishing to file as an intervenor in the rate case, and ACC staff and intervenor testimony is due Nov. 25.

CCWC will provide its response to testimony by Dec. 30, and the public hearing before the ACC is scheduled to begin Feb. 18, 2014.

Additional information and documents related to the rate case can be found at epcor.com/chaparral or www.acc.gov. Customers may contact the company via email using chaparralratecase@epcor.com.