EPCOR Water has filed its completed Systems Improvement Benefit program for Fountain Hills with the Arizona Corporation Commission, so Chaparral City Water Company customers will likely see a surcharge added to their bills this fall.

EPCOR filed the documents with the commission July 10, and the ACC has 30 days to verify the work is complete and approve the surcharge.

Jeffrey Stuck, director of operations for EPCOR Water USA, Eastern Division, said the SIB projects were divided into four categories for the program’s first year.

Stuck said the company installed 294 new service lines (the connection between the main and the meter), replaced 25 fire hydrants, replaced 65 valves and upgraded 1,631 residential water meters, some of which were 30 to 40 years old.

Stuck said EPCOR is pleased that the ACC allowed them to implement the program with its last rate case approved about one year ago.

The SIB provides the company the opportunity to plan for infrastructure improvements and recover those costs more efficiently than the traditional rate filing system, according to Stuck.

“It allows us to provide customers with a reliable, sturdy system,” he said.

“Valves, for instance, are often installed by developers, and a lot of times they will choose a type we might not use.”

Stuck said they are finding a lot of “butterfly” valves, which often simply break off when workers try to operate them.

“We are replacing them with gate valves,” Stuck said.

The SIB is breaking new ground with rate systems in Arizona, according to Rebecca Stenholm, director for public and government affairs for EPCOR Water, USA.

“This helps the company make repairs in a timely manner and more gradually pass the cost to the user,” Stenholm said.

When EPCOR goes back to the ACC in five years, as ordered by the commission, a significant portion of the rate request will already be in place, thus reducing the one-time request.

Stuck said there are a couple of significant advantages to using the ongoing SIB program. One of those is a major topic of discussion during time of drought – saving water.

Stuck since EPCOR took over CCWC in 2011, their efforts have resulted in a noticeable savings in water consumption.

He said that at the time EPCOR took over the water loss rate was around 17 percent. Now that loss is at 12 percent and continues to work its way down.

Another advantage is additional flexibility in working with town government in coordinating water improvements with street improvement projects.

Stuck said many of the SIB improvements done this past year took place in the Saguaro Boulevard right-of-way ahead of the new paving project.

He said they have also looked at the town’s plans for future resurfacing of streets and adjusted their plans to get in and make the water company repairs and replacements ahead of the street construction.

“It is much more costly to do these repairs after street improvements are done,” Stuck said.

Not everyone is a fan of the SIB program.

The state Residential Utility Consumer Office has filed suit challenging the rate system’s legality.

Last summer when the EPCOR case was before the ACC, RUCO objected to the SIB, stating it was intended for use by financially strapped utilities, not fiscally stable companies like EPCOR.

They stated it adds to the customer’s water rates without the hearing procedure prescribed by law.

According to RUCO, the Arizona Court of Appeals last month heard oral arguments in its case against SIB involving Arizona Water.

There is no decision at press time, and it is uncertain how any court decision might impact the EPCOR rate agreement.

Stenholm said that although final figures are pending ACC review, the estimated monthly surcharge on a residential home with a 3/4-inch water line will be approximately 74 cents, after an SIB efficiency credit.

After the staff review of the SIB work the corporation commissioners will consider the surcharge in open session, which has not been scheduled to date.