SLIDE 1
EPCOR Water USA
- Water and wastewater service for approximately
350,000 customers
- 14 water, six wastewater districts
- 22 communities
- Seven counties
- Two states
Wastewater Consolidation 2016 Rate Application EPCOR Water USA - - PowerPoint PPT Presentation
Wastewater Consolidation 2016 Rate Application EPCOR Water USA - - PowerPoint PPT Presentation
Wastewater Consolidation 2016 Rate Application EPCOR Water USA Water and wastewater service for approximately 350,000 customers 14 water, six wastewater districts 22 communities Seven counties Two states Rates 101
SLIDE 2
SLIDE 3
Rates 101
SLIDE 4
Rate Setting
- EPCOR regulated by Arizona Corporation Commission
- We use a uniform system of accounts
- Rates approved through formal rate application
- All expenses reviewed and approved by ACC
- Investment evaluated for prudency and used/usefulness
- Customers noticed
- Procedural schedule set by Administrative Law Judge
- Process takes 24-30 months to complete
SLIDE 5
SLIDE 6
SLIDE 7
SLIDE 8
Wastewater Consolidation
2016 Rate Application
SLIDE 9
Summary
- Using fresh financial data from 2015, EPCOR was
- rdered to evaluate three options:
- Keep all five districts as they are today (status quo)
- Consolidate all five districts into one large district
- Create seven smaller districts based on “treatment facility”
- EPCOR is recommending full consolidation
- Proposed consolidated rate of $41.02/month
- Phased in over three years
SLIDE 10
Summary
Option 1: Status Quo
SLIDE 11
Rate Design – Current
SLIDE 12
Rate Design – Option 1
SLIDE 13
Summary
Option 2: Consolidation
SLIDE 14
Rate Design – Option 2
SLIDE 15
Rate Design – Option 2
SLIDE 16
Summary
Option 3: Deconsolidation
SLIDE 17
Rate Design – Option 3
1Combined Sun City West & Northeast Agua Fria 2Arizona Gateway only has Commercial class of customers
SLIDE 18
Why Consolidation?
- It’s cost-effective and efficient
- Provides economies of scale
- Aging infrastructure in need of
replacement
- $41.02 is comparable to the area
average for wastewater
- It’s what customers expect
- electric, natural gas,
telecommunications and cities and towns are all consolidated
SLIDE 19
The ACC and Consolidation
- Policy adopted June 24 favors consolidation
- Considered for any utility
- Decisions in context of a rate case
SLIDE 20
Infrastructure
- ASCE 2013 Report Card
gave water infrastructure D grade
- Ongoing need to replace
aging infrastructure
- Investment needs total
more than $1.7 trillion1
- Recovery of costs critical
1 Buried No Longer: Confronting American’s Water
Infrastructure Challenge. AWWA
SLIDE 21
$163 million in the next 10 years is needed to keep your wastewater system running properly.
Investing in You
SLIDE 22
Additional Elements of Case
- Total revenue increase of $5.15M
- Return on equity of 10.65%
- Low Income Assistance Program
- Increase participation
- Focus on district impacted by increase
- Capital investment costs completed
within 18 months of the 2015 test year
- Rate case expense
- Costs deferred from 2014
- Complex process to develop three options
SLIDE 23
SLIDE 24
Next Steps
- Procedural schedule
- Ongoing communication
- Explore options for settlement
- Water consolidation rate case
SLIDE 25