Key Points:

• Rep. Teresa Martinez wants the Residential Utility Consumer Office to reprioritize

• RUCO declined to intervene in a rural water rate case at the Arizona Corporation Commission

• Martinez says the agency needs to focus on small utility customers, not large ones like Arizona Public Service

A Republican lawmaker wants the state agency tasked with advocating for residential utility customers to reprioritize after it declined to assist the customers of a rural water utility. 

Rep. Teresa Martinez, R-Casa Grande, introduced House Bill 2113 to require the Residential Utility Consumer Office to intervene in rate cases at the Arizona Corporation Commission if a utility company attempts to increase rates by 100% or more. Martinez’s bill comes after RUCO was unable to intervene in the Picacho Water and Sewer Company rate case, which originally proposed a 125% increase in water rates and a 188% increase in sewer rates.

Martinez sent a letter to RUCO Director Cynthia Zwick in September regarding the rate case, after hearing from constituents that the agency had declined to intervene. Since then, Zwick said she has met with Martinez to discuss RUCO’s caseload and resource constraints, but Martinez still believes the agency should refocus its efforts. 

“RUCO is prioritizing the number of people rather than the amount of the proposed rate hike, leaving rural Arizona behind,” Martinez said in a statement. “Instead of fighting for the little guy facing 200 or 300 percent rate hikes, RUCO is concentrating its attention on larger population centers where proposed increases average around 15-20 percent. This is a fairness issue.”

Zwick told Martinez in an October letter that RUCO has the resources to intervene only in the largest utility rate cases that affect the most utility customers in the state, such as those for Arizona Public Service and Tucson Electric Power. After reviewing the Picacho cases, Zwick decided the agency did not have the bandwidth to get involved.

“It’s kind of been historic, but it’s certainly a decision that I’ve made independently and continue to support, which is we need to look at the large cases that have the most impact on the most customers,” Zwick told the Arizona Capitol Times. “(Those cases) require an incredible amount of time and attention.” 

A spokesperson for House Republicans said Martinez was not available for an interview, but in an October letter to Zwick, she criticized the agency’s decision to only take on large utility rate cases.

“If you did not prioritize rate cases by utility class alone, then your agency might have some additional time and resources available to dedicate to other, smaller utilities which may not require as many pages of testimony, as many days of hearings, or as many billable hours from consultants,” Martinez wrote.

RUCO has also received criticism from the Robson Ranch Task Force, created by the residents of the Robson Ranch retirement community in Eloy to oppose the Picacho Water and Sewer rate increases. Its leader, Raul Salmon, told the Arizona Capitol Times in December that he and other residents struggled to reach RUCO staff and were disappointed by the agency’s response.

“They go, ‘Well, you’re 1,800 houses this is small fry,’ but it’s not small fry to us,” Salmon said. “They’re going to double our rates and you’re looking at us like ‘What?’” 

The Robson Ranch Task Force instead pooled money to hire a Phoenix-based attorney to represent them in the rate case, which is still ongoing at the Corporation Commission. Small water and sewer companies often come into the commission asking for triple-digit rate increases, an issue that commissioners have been working to combat for decades. 

RUCO is not typically an intervenor in smaller water and sewer cases; instead, it intervenes in rate cases for larger companies like EPCOR and Global Water. Currently, RUCO is a party in five ongoing rate cases and anticipates intervening in two more this year, according to documents provided to Martinez. 

Zwick said RUCO would not be able to manage the workload created by Martinez’s bill, but she and her staff are still evaluating its impact on the agency. RUCO currently has nine employees and operates on a budget of nearly $1.6 million. 

“We would love to be able to enter into every case and represent every residential customer, but the reality is, we’re just simply unable to do that,” Zwick said.