Corporation Commission hears Anthem residents on water rate hike
by Kathleen Stinson

ANTHEM – About 450 people attended the state Corporation Commission’s public comment hearing last week on the Anthem water and sewer rate hike case.

Arizona American Water has requested substantial increases in its rates for Anthem customers, and the commission took public comment last Thursday night at the Boulder Creek High School auditorium. A hearing was held in Phoenix on the proposed rate hikes May 29.

Residents’ comments to Commissioners Gary Pierce and William Mundell, present at the hearing, varied from “No way” to proposing a class action lawsuit against AAW.

Anthem Community Council board member Frank Grimmelmann spoke first, telling those present the proposed rate hike is based not so much on the company’s cost of infrastructure but on its request for a fair rate of return on its investment, or equity.

Arizona American has stated in its application to the commission that a rate increase is needed in part because the bulk of repayment to Del Webb Corp/ Pulte Homes for the cost of water and sewer infrastructure is soon coming due as the community nears build‑out.

The state’s Residential Utilities Consumer Office, an agency which represents consumers in rate cases, has intervened in the AAW case on behalf of Anthem residents.

RUCO Director Stephen Ahearn told The Desert Advocate in an interview the next day, “Mr. Grimmelmann is misinformed. The return on equity is only a small, but significant, part of the case.”

Grimmelmann said in a later interview that he thinks the rate‑of‑return question is more significant because the parties involved are in substantial agreement on the value of the infrastructure.

Ahearn maintains the commission is currently being asked to determine the value of that infrastructure and its value is being brought into the company’s rate base.

An analogy drawn is an Anthem resident making payments on a $100,000 house all of a sudden being asked to make payments on a $500,000 house. The large payments now due for infrastructure have increased the “value” of the company and rate of return.

Several residents said the developer should have disclosed up front, when houses were sold, the large infrastructure costs property owners would have to repay at build‑out.

Pat Henson said she wants the Anthem Community Council to file a complaint with the state Real Estate Department against Del Webb/Pulte for lack of disclosure of water and sewer infrastructure costs.

“I may file a claim in Small Claims Court and take the $10,000 I get (from a judgment) and use it to pay my water bill for the next 10 years,” Henson said.

“Pulte has made millions of dollars (on Anthem) ... and what are we, the citizens, left with–the bill,” said Rhonda Klores. “If they made the money, they should help the community.”

Klores went on to say the community is in a real estate slump and many people want to sell their homes but can’t. And houses are being foreclosed on, she noted, adding that a significant rate hike will push some people out of Anthem.

Another resident, Richard Lindner, stated the developer has already been paid for a lot of water it has not delivered. Whether he is out of the state or at his Anthem residence, according to Lindner, his water and sewer bill varies only a few dollars. He said most companies charge customers based mainly on their usage but AAW has high minimum water and sewer charges.

Sandra Ball also said Del Webb/Pulte should have disclosed to property owners when they bought their houses that they would have to pay the utility for infrastructure. She stated that Vistancia, a large master‑planned community in Peoria to the west, is disclosing this information to home buyers. The Anthem developer did not, she claimed, and referred to pages in sales booklets she was given when she bought her home.