By Maja Peirce
Liberty Utilities, the private utilities company that provides wastewater services to The Boulders community in Carefree and Scottsdale, is proposing to increase sewer utility rates. They are proposing an increase for residents from $79 to $110 per month and to raise commerical rates from $85 to $114. Residents within the community are protesting and plan to testify at hearings scheduled to begin September 16. These hearings will examine the legitimacy of Liberty Utilities expenses and proposed increase in rates.
According to Bob Moore, local activist and Director of Kiwanis Club of Carefree, Liberty Utilities is a division of a Canadian company known as Algonquin.
They purchased a wastewater treatment plant previously located on a residential lot within the Boulders, and signed a contract to provide gray water for the golf course within the Boulders for 20 years.
“Almost immediately there were smells and noise and other problems with the facility. They attempted to adjust for that. It was an irritation for the people in the Boulders for a long time,” said Moore.
After years of smell and noise complaints by residents to Maricopa Air Pollution (MAP), the Arizona Department of Environmental Quality (ADEQ), and Arizona Corporations Commission (ACC), Liberty made the decision to close the plant in 2016. Liberty Utilities failed to provide the graywater and were sued by the golf course.
As stated by Moore, the agreement was reached that they would close the plant and increase the rates from $65 to $79 per month for residents, and commercial business rates to rise up to $85 plus a charge for every additional gallon. This was to help pay for the process of closing, decommissioning, and soil mediation.
“Back in about 2005 during the early questions and protests, the ACC asked Liberty Utilities what it would cost to close the plant.” said Moore. The former president of Liberty Utilities in Arizona, Greg Sorenson, estmated the cost would be between $1.5 and $2 million. Three years later they increased this estimate to about $4 million, according to Moore. “There were absolutely no engineering studies done to come up with these estimates,” said Moore.
According to Moore, the ACC established a cap of approximately $3,299,700 for the project in 2016 but by the time they finished in 2018, Liberty Utilities spent slightly over $11 million dollars.
Moore states that after further examination of Liberty Utilities annual financial statement, the ACC determined Liberty Utilities should be getting a 7% annual profit return. However, the Residential Utility Consumer Office (RUCO), an independent organization that checks and backs up the ACC’s studies, discovered Liberty received 18%, 19% and 29% in profit these last few years. There is a difference of 11%, 12%, and 22% between what their annual return is estimated to be and what it is. Concerned residents such as Moore, feel it is unfair to ask for a rate increase when Liberty Utilities is well over their allowable margin of profit.
Liberty Utilities claim they need to raise the rates by 41.7% in to maintain profit margins due to an increase in customers over recent years. Some residents, such as Moore, are unclear why Liberty Utilities need a rate increase because they no longer treat the water. They own the pipeline and answer maintenance calls about any smells occurring in the community but no longer operate the treatment plant.
Starting September 16, hearings will take place to address concerns about the increase of rates. Liberty Utilities is required to mail each of its customers a notice of the hearings as a bill insert.
To view the live hearings, visit azcc.gov/live and click on the link to the proceeding.
