On a 2-3 vote, the Arizona Corporation Commission rejected the recommendations of the Administrative Law Judge and failed to approve a rate increase for the Ajo Improvement Company.
The rate increase was contained in the judge’s Recommended Opinion and Order and represented an approximate 120% increase for electric, water, and wastewater utility customers.
Chairman Burns and Commissioner Olson voted in favor of the increase, with Commissioners Kennedy, Tobin, and Dunn voting against.
[metaslider id=65385]
Ajo Improvement Company is a Class C public service corporation serving approximately 1000 customers in Ajo, AZ in Pima County. This was a consolidated rate case for electric, water, and wastewater customers. Historically, Ajo was a company mining town, with Freeport McMoRan owning the utilities and heavily subsidizing the rates paid by customers. However, the mine was closed in 1984 and all mine-owned properties were sold to individuals, meaning that today Ajo is no longer a company town. The company spent $47.8 million on capital improvements since its last rate cases, 2000 for electric and 2004 for water and wastewater. The capital expenditures were paid by Freeport McMoRan and were not recovered through rate base. The company was only seeking to recover its operating expenses.
Commissioners heard from many Ajo Improvement Company ratepayers, Pima County officials, and the Superintendent of schools in Ajo who spoke in opposition of the rate increase, citing the crippling impact such increases would have on the economic development of the town, the personal finances of residents, and the school system.