Hearing - W-01812A-25-0166 - Bermuda Water Company, Inc. - May 14, 2026

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Arizona Corporation Commission 3h 13m 8 agenda items transcribed 3 days ago official recording ↗

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What is the purpose and procedural setup of the hearing?

Chris Nichols 0:01

Right, I've got nine o'clock, so let's go on the record. Uh good morning everyone. This is the time set for an evidentiary hearing in the matter of the application of Bermuda Water Company Inc. For a determination of the fair value of its water utility plant and property, for increases in its rates and charges for water utility service, and for related approvals. Docket number W zero one eight one two A twenty-five zero one six six. I'm administrative law judge Chris Nichols and I have been assigned to preside over this matter. Uh let's go ahead and take appearances of the parties beginning with the applicant, Bermuda Water Company Inc.

Jeff Crockett 0:42

Good morning, Judge Nichols, Jeff Crockett, appearing on behalf of the applicant, Bermuda Water Company, Inc. And seated to my right is Alexi Delinko, who is going to be testifying a little bit later this morning. And to his right, James Eason, who's the president of Bermuda Water Company. Good morning all.

Chris Nichols 1:01

And for staff.

Eli Gollup 1:02

Yes, Your Honor, Eli Gollup, first uh staff attorney. Thank you.

Chris Nichols 1:05

Good morning, Mr. Gollup.

Eli Gollup 1:06

Good morning.

Chris Nichols 1:08

All right. Any uh procedural items that we ought to address before we move forward? Mr. Crockett? Nothing that I'm aware of.

Eli Gollup 1:15

Mr. Gollum. Uh no, nothing. Uh I'm sure the court is already aware. Our our primary witness, uh Britt Baxter, will will be appearing uh on over WebEx.

Chris Nichols 1:26

Sounds good. All right. Um since we have already completed the public comment, we can move right on to opening statements. Uh Mr. Crockett, does uh the company have an opening statement this morning?

Jeff Crockett 1:36

Yes, Your Honor. And and before I uh give give my opening statement, I would note that our witnesses, uh other than Mr. Delinco and potentially Mr. Eason, are on WebEx this morning and are available. I don't intend to call them, but they would be available to answer questions if we get to that point. Sounds good. Thank you, Mr. Crockett. Well, Bermuda Water Company provides water utility service to portions of Mojave County, Arizona, pursuant to a C CNN first granted by the Arizona Corporation Commission in nineteen sixty-two. and expanded thereafter. During the test year ending January thirty-one, twenty twenty five, Bermuda served approximately ninety four hundred sixty residential customers, thirty three hundred and seventy commercial customers, and one hundred and fifty other cost customers, including wholesale customers.

Jeff Crockett 2:31

Bermuda's present rates and charges were approved by the Commission in Decision 79084 as amended by Decision 79192 using a test year ending June 30, 2022. Revenues from Bermuda Bermuda's utility operations are presently inadequate to provide the company a fair rate of return on the fair value of its utility plant and property devoted to public utility service, which utility plant has increased significantly since the last rate case. In addition, Increases in the company's operating expenses have outpaced increases in revenue since the last rate case. These changes were Have caused the revenues produced by the current rates for water utility service to become inadequate to meet operating expenses and provide a reasonable rate of return for Bermuda.

Jeff Crockett 3:25

Thus, the company filed an application in this docket on August eleventh, twenty twenty five, seeking to increase its water rates. In its application, Bermuda proposed a fair value rate base of nineteen million nine hundred and thirty six thousand eight hundred and eighty six dollars. The company used its original cost rate base as its fair value rate base to minimize disputes and reduce rate case expense. During the test year, Bermuda's adjusted gross revenues. were six million five hundred sixty six thousand seventy nine dollars and the company's adjusted operating income was one million six hundred thirty five thousand two hundred and six dollars, leading to an operating income deficiency of two hundred fifty eight thousand four hundred and eighty eight dollars.

Jeff Crockett 4:14

The rate of return during the test year as calculated by the company was eight point two percent. In its application, Bermuda requested an increase in gross revenues of three hundred forty eight thousand three hundred and sixty six dollars.