New
Service Instructions and Form (Residential)Frequently Asked Questions
- Who controls how much Liberty Water can charge for water and wastewater service?
- What will be the new rates?
- What if we are on a limited income and cannot afford the increase?
- Why is the rate increase so much more than the cost of living?
- How can rate payers control what the company spends BEFORE it is spent and requested to be recovered by a rate increase?
- Does Liberty Water have plans to restrict or limit its customers' water use?
- How do the Liberty Water water and wastewater rates compare to other utility rates in the area?
- Why did you wait so long to raise the rates?
- Are the wastewater treatment plant upgrades to correct the odor problems included in this rate case? If so are the ratepayers paying for someone else's mistake?
- How has Liberty Water been affected by the Phoenix- Goodyear Superfund site? Are there any expenses in this rate case to offset those costs?
- When will we know the outcome of the Liberty Water request to the ACC?
Who controls how much Liberty Water can charge for water and wastewater service?
As a public service corporation, Liberty Water is regulated by the Arizona Corporation Commission (ACC). The ACC, an independent state agency comprised of five elected Commissioners, reviews the rate request and closely audits the company's books to determine a rate which will provide the utility recovery of its actual operating expenses and a fair rate of return on the value of the property devoted to serving the public.Generally, rates are only increased after the improvements are completed.
In contrast, municipal utilities typically project the community's future demand for water and wastewater service and then estimate how much money the city will need to ensure an adequate supply of water and wastewater treatment. The City Council will use these projections to determine the rate increase needed to generate the revenue before the improvements are made.
What will be the new rates?
Under the rates proposed by Liberty Water, the average residential customer's monthly water bill would increase to approximately $42 per month for a 3/4 meter ($55 for a 1 meter) and the average monthly residential wastewater bill would increase to $49. Combined, the increases represent about $1.50 per day. It bears mentions that Liberty Water’s water and wastewater rates have not been increased for almost seven years, and any approved increase will not be effective until sometime in 2010.
What if we are on a limited income and cannot afford the increase?
As part of the rate application, the company will be requesting approval to implement a low-income relief program to assist some customers suffering undue financial hardship.
Why is the rate increase so much more than the cost of living?
Rates are based on actual expenditures to operate the utility plus a return, not on the cost of living. Since 2003, the cost to produce 1,000 gallons of water has increased from $0.16 to $0.38. In addition, the company has spent $58 million in new drinking water well, new arsenic treatment equipment, a new water reservoir and other system improvements.
Combined the proposed water and wastewater rate increases will cost the average homeowner about $1.50 per day.
How can rate payers control what the company spends BEFORE it is spent and requested to be recovered by a rate increase?
In short, they can’t. However, the process for requesting a rate increase is very difficult. A utility is never guaranteed a rate increase and the final amount is determined by the Arizona Corporation Commission.
When making the decision to spend money on a new facility or system improvement, the company conducts a rigorous internal review to determine if the project is needed, if the project is well-designed to be as efficient and cost effective as possible and if the company can expect to receive a rate of return from the ACC for the investment spent.
To remain a strong utility able to ensure its customers a safe, reliable drinking water supply and wastewater service, Liberty Water must receive a return on investments that satisfies its shareholders. It is not in the company's best interest to waste money on projects that are frivolous or unnecessary.
Does Liberty Water have plans to restrict or limit its customers' water use?
Liberty Water does not have legal authority to restrict water usage or assess fines for wasting water. However, Liberty Water supports the State of Arizona goal of conserving groundwater resources. Towards that end, the company does coordinate with the cities of Avondale and Goodyear that have water waste ordinances. Additionally, if a Liberty Water employee sees a broken irrigation line or other water waste, they will leave a note on the customer's door, but Liberty Water cannot take other actions.
How do the Liberty Water water and wastewater rates compare to other utility rates in the area?
It is difficult to make a direct comparison of water rates since there
are many factors that may dramatically increase or decrease the cost of
producing and delivering water. Key factors affecting the cost include
the source of water (groundwater or surface water), quality of the water
(how much treatment is needed to meet drinking water standards) and the
geography of the service area (greater elevation changes require more pumping).
The following is a comparison of current and proposed rates based on a
2009 survey of surrounding utilities conducted by Liberty Water.
*Not aware if these jurisdictions are planning rate increases as well.
Why did you wait so long to raise the rates?
We really haven't waited that long. Even though it has been more than seven years since the last rate increase, there was no reason to request an increase until the last three years.
As shown on the chart below, most of the $58 million in improvements has been spent in the last three years. Also, operating costs did not increase dramatically until 2006 when additional chemicals and supplies were needed to operate the new arsenic treatment facilities and in the last couple of years with the large increases in the cost of power due to increases in APS’s rates approved by the ACC.
Are the wastewater treatment plant upgrades to correct the odor problems included in this rate case? If so are the ratepayers paying for someone else's mistake?
Yes, along with the cost of the cost of construction and operation of
the new plant that went into operation in 2002 but has not been included
in a previous rate case. In other words, the ratepayers have not
yet paid for the cost of operating this plant or for the cost of a return
on its value.
The cost of new odor controls installed was necessary to reduce the odor
to below regulated levels. When originally constructed and operated, the
plant met and exceeded all odor regulations. However, after homes were
constructed immediately adjacent to the plant, complaints followed and
the ACC ordered Liberty Water to make further odor control improvements. We did. The
technology for reducing odors at wastewater treatment plants has improved
dramatically.
How has Liberty Water been affected by the Phoenix- Goodyear Superfund site? Are there any expenses in this rate case to offset those costs?
Yes. Since being notified in 2006 the contaminated groundwater plume was growing, Liberty Water staff has worked closely with the EPA to ensure the groundwater contamination does not endanger your drinking water supply. We also began monthly sampling and testing of the groundwater wells closest to the contamination. There has been no contamination found in Liberty Water water wells. While this rate case does include reimbursement for the additional testing costs, but only accounts for less than one-half of one percent of the increase.
When will we know the outcome of the Liberty Water request to the ACC?
The Arizona Corporation Commission has scheduled a public hearing to commence January 4, 2010. Based on the agency’s time-clock, we expect a final decision in June 2010. In the meantime you can check the Liberty Water website home page, www.Liberty Waterwater.com, for updated information or call the rate information line at 623-298-3773. You may also contact the ACC.