PHOENIX
– Pulte Homes responded to questions posed by the Arizona
Corporation Commission and other entities on Aug. 17,
but provided few answers to the many questions surrounding
the company’s infrastructure payback agreement.
Pulte
was brought into the Anthem rate‑hike proceedings
by the commission in an effort to obtain additional information.
In
four separate filings, Pulte addressed questions surrounding
its involvement in setting Anthem’s utility rates when
the planned community was approved 10 years ago and, in
addition, how the proposed method of paying back infrastructure
investment costs is going to affect water rates for Anthem
customers of Arizona‑American Water.
“It’s
responsive,” said Residential Utility Consumer Office
Director Stephen Ahearn. “But we haven’t learned much
yet. We’re trying to read between the lines and see if
there are other questions we need to be asking.”
Each
filing began with a “continuing objection” to the requests,
stressed Pulte is a “non‑party” and refused to answer
any financial questions posed, citing pertinent information
is available from the utility companies, other information
is irrelevant, and that the information requested “exceeds
the Commission’s investigatory authority in this matter.”
The
focus of the commission’s July 13 hearing was the refund
to Del Webb/Pulte for Anthem water infrastructure. The
payment due this past June was $4.2 million, but next
year’s payment is expected to be $19.8 million.
One
issue from the July hearing concerned a letter from Pulte
employee Ben Dutton stating the repayment should not be
the responsibility of Anthem customers. Upon being asked
by commission staff to clarify the statement, and if that
statement was Pulte’s official position, the company answered
that the letter reflected the writer’s “personal opinion
that Arizona American’s parent companies are responsible
to assure the solvency of their subsidiaries.”
To
RUCO, Pulte gave a similar answer in regard to the Dutton
letter. “Mr. Dutton felt that Arizona American was unfairly
asking Pulte at this late date to renegotiate a contract
that Arizona American assumed, and that has been in place
for years.”
To
questions posed by Commissioner Kristin Mayes, separate
from commission staff questions, Pulte said it was unable
to locate documents from the 1997‑98 time period
showing Del Webb’s projection for build‑out of the
community. At the July 13 hearing, Charles Enochs, a Pulte
vice president, testified the initial estimates were for
a 20‑year build‑out.
The
community will be considered built out within the coming
year, according to Enochs’ testimony.
Mayes
also asked for a copy of the documentation provided to
Anthem home buyers concerning utilities and development
fees. Pulte stated the current documentation package available
now is all that they have. “Earlier home buyers may have
received earlier versions of this package.”
Mayes
could not be reached for comment on the latest filing.
The
document did not state how long the current documentation
package has been in use.
Estimates
show a 66 percent increase in Anthem’s water rate and
a 40 percent increase in the wastewater rate to be able
to fund the “true‑up” payments, as they were called
by Enochs.
The
Pulte vice president stated at the hearing the problem
is, Pulte now has invested more money than originally
anticipated. Using round numbers, Enochs said the company
would have invested $50 million to this point in the form
of a no‑interest loan. However, since the development
now is almost finished, they have invested closer to $100
million.
And
they are paying finance charges for that money invested,
according to Enochs, and delaying repayment will cost
Pulte more money.
