Arizona-American Water Company, Inc. - Request for an ACRM

On December 14, 2004, Arizona-American Water Company, Inc. ("Arizona-American" or "Company"), a wholly owned subsidiary of RWE AG, filed a motion asking (1) that the Commission re-open the record in the Company's most recent rate case (filed on December 13, 2002) so as to consider modifying the final decision by adding an arsenic cost recovery mechanism ("ACRM") and (2) to waive a three-year rate moratorium of a prior order, which approved the sale of Arizona-American to RWE, to include the Paradise Valley Water District in the proceeding*.  In return for approving the request, Arizona-American agreed to drop court appeals that the Company had filed on both the rate case and RWE orders. 

RUCO intervened in the proceeding to insure that ratepayers would not be adversely affected by the implementation of the proposed ACRM. 

On July 1, 2005, RUCO filed direct testimony.  RUCO witness Marylee Diaz Cortez, CPA, recommended approval of Arizona-American's request with the exception of the Company-proposed hook-up fee for the Lake Havasu district.  Arizona-American filed rebuttal testimony on July 21, 2005.  Both RUCO and ACC Staff presented oral surrebuttal testimony at the evidentiary hearing that took place at 10:00 a.m. on Tuesday, July 26, 2005 at 1200 W. Washington in Phoenix.  The Company presented oral rejoinder testimony during the hearing.  Closing briefs were filed by the parties to the case on August 29, 2005.

After weighing the evidence presented during the proceeding, the presiding administrative law judge ("ALJ") issued his recommended opinion and order ("ROO") on October 3, 2005. 

During a regular open meeting held on October 18, 2005 at the Commission's offices at 1200 W. Washington in Phoenix, the five ACC Commissioners voted to adopt the ROO which recommended approval of Arizona-American's ACRM request.

The Commission subsequently approved step-one (capital expenditure cost) surcharges for the Company's Agua Fria and Lake Havasu water districts in June and December of 2006 respectively.

*  Arizona-American eventually decided not to include the Paradise Valley Water District in the proceeding

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