The Arizona Corporation Commission has finally rendered its decision regarding a water rate increase for Sun City West. The news is not good. The ACC approved a whopping 66.11 percent increase. Commissioner Bob Stump declared Arizona American would be "crippled" if their increase demands were not met. That’s debatable. Unless on the verge of bankruptcy, it seems the water company has managed to live within its means for the past four years without an increase. They can’t be doing badly if they can transfer close to $1 million back to their German-owned parent company, and pay bonuses to their executives.

The rate increase was submitted on the basis of test year 2005, when the water company posted revenues of over $5.7 million dollars and showed an adequate profit margin. The fact is the water company is seeking $4.3 million more in revenues, to almost double what was taken in; hence the request for a 69 percent increase. It looks like they will have their way.

Admitting the rate increase request for Sun City West was out of line, ACC Chairperson Kirsten Mayes tried to justify it by stating: "They (SCW) have gone the longest without an increase since 2004."

Apparently the commission is of the mindset that it has to play make-up for the water company. Her remarks inferred Arizona American should be entitled to an equated 13.22 percent increase every year in order to operate — despite the fact all other utilities are experiencing returns on their equity ranging from 6 percent to 7 percent, with rate increases not being adjusted yearly.

In considering the increase, the ACC turned a deaf ear to the Residential Utilities Consumer Office (RUCO), its own consumer arm which recommended a lesser increase. It also turned a deaf ear to PORA representatives who made a concerted and well-documented effort to effect a lesser increase. The concerns of 500 residents who sent letters opposing the onerous amount of the rate increase were also ignored.

Sun City West is paying hundreds of thousands of dollars each year to the water company for purposes other than water and sewer service — a situation that should be closely scrutinized.

While commissioners said they had reservations about approving the size of the Sun City West rate increase, they voted for it anyway. That raises doubts about their sincerity. If they really had reservations, they would have followed their gut feeling and voted against the increase. Special thanks to Commissioner Sandra Kennedy, a smart lady who saw through the charade and did just that with a no vote.

I suspect Arizona American won’t be happy until every ratepayer in its service districts is paying water bills of $100 per month or more.

They probably intend to accomplish that goal by alternating between water and sewer rate increases on a regular basis, and I don’t see a compliant ACC standing in their way. The next hit on Sun City West should be a request to increase our sewer rates.