On Wednesday, the Arizona Corporation Commission approved a massive increase for Ajo Improvement Company’s authorized rates and charges for its water, wastewater and electric divisions.
The public service corporation provides water, wastewater, and electric service to approximately 1,000 connections each in a one square mile area of Ajo in Pima County.
In the company’s application, it requested a 20 percent operating margin for its water and wastewater divisions and 15 percent operating margin for its electric division. In the final decision reached by the commissioners, the company’s rate increase was approved, using a five percent operating margin.
The company has made over $47.8 million of capital improvements since its last rate case, to repair the water, wastewater, and electric division systems.
The increase will be implemented over a 10-year period.
The company will not be allowed to collect lost revenue and interest caused by the phase-in.
Other provisions require the company to not file a new rate case until 2027 and to file future rate cases for only one division at a time.
The company has agreed to provide $20,000 per year in bill assistance in years one and two of the new rates and $25,000 per year thereafter as an alternative to a low-income tariff as proposed by Commissioner Kennedy. The Commission adopted the Kennedy Amendment that will require the company to make available programs for assistance to deployed service members and a discount to disabled military veterans.