Global Water Resources, a pure-play water resource management company, has received approval from the Arizona Corporation Commission (ACC) to establish new water and wastewater rates for 96% of its active service connections, effective August 1, 2022.
The last rate proceeding approved by the ACC for Global Water was in 2014, which resulted in a rate increase that was phased-in annually. It has helped fund substantial infrastructure investments by the company.
The new rates are expected to result in a collective revenue increase of approximately $2.2 million on an annualized basis, based on 2019 test year service connections, and will be implemented in three stages, on August 1, 2022, January 1, 2023, and January 1, 2024.
“As with our previous rate increase, the additional revenue we expect to generate from the higher rates approved yesterday is anticipated to provide the financial resources we need to meet the current and future needs of our customers,” stated Global Water president and CEO, Ron Fleming. “We believe this will enable us to sustain the high quality of our water and wastewater infrastructure, as well as improve services for the communities we have the privilege to serve.”
The ACC also approved the consolidation of rates and corporate entities for several Global Water utilities in Pinal County, including Red Rock, Santa Cruz, Palo Verde, Picacho Water, and Picacho Utilities. In addition, the ACC approved, among other things, acquisition premiums related to Global Water’s acquisition of Red Rock and Turner Ranches utilities. This approval authorizes Global Water to reclassify a portion of goodwill on its balance sheet as an asset that can be reimbursed through increased rates over a period of 25 years. The $2.2 million rate increase includes the acquisition premiums.
“We applaud the ACC’s approval of our acquisition premiums as a critical step forward in dealing with numerous challenges in our industry, and it supports our mission of acquiring utilities that require upgrades and improvements in customer service,” noted Global Water chief strategy officer, Chris Krygier. “We continue to seek acquisitive opportunities that are synergistic to our growing portfolio of water and wastewater utilities and particularly where our application of Total Water Management would be beneficial to the communities we serve.”
“We expect the consolidation of our utilities in Pinal County will create economies of scale that will be beneficial to all of our customers,” added Fleming. “This is because as we continue to grow organically and through acquisitions, yesterday's approved revenue increase will be spread over more active customer connections. Looking ahead, our industry-leading approach to utility consolidation, automation and water resource management will continue to ensure safe, high-quality water services for the community.”
Global Water’s existing six-tier tariff structure is believed to be unique in Arizona. It incentivizes customers to conserve water through a rebate program that provides a credit on their water bills if they use 10% less than the average customer in their community.
In 2021, Global Water customers across Arizona also received more than $82,000 in financial aid from its customer assistance program, which was expanded to include those who had difficulty paying their utility bills due to COVID-19.
The customer assistance program is available to qualified customers who meet low-income guidelines, have a medical hardship, are a deployed service member, disabled veteran or furloughed worker. Such qualified customers are eligible to receive a bill credit benefit of up to $350 annually for their water utility service and up to $350 for their wastewater utility service, totaling $700 annually.