Hearing - W-03528A-25-0056 - Picacho Water Company SW-03709A-25-0057 - Picacho Sewer Company W-03528A-25-0096 - Picacho Water Company SW-03709A-25-0097 - Picacho Sewer Company
meeting
Arizona Corporation Commission
7h 3m
1 speaker
8 agenda items
transcribed just now
official recording ↗
Transcript
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What is covered in the opening remarks and witness swearing‑in?
We are back on the record. Sorry about the delay. We had to restart this computer, but it's fine now. And if you saw me talking to Mr. Rich, it was about documents, whether they had been delivered to the hearing division or not for the revised exhibits list from yesterday, the email that I just saw this morning because you know I was in here. OK. So I believe that we are going to have Mr. Parcell come up first thing. Is that correct?
That's my understanding as well.
Okay. And it looks like there he is.
Is he going to be? There we go.
Some place I can see him. Can you see him okay?
I can
see him. Okay. Mr. Parcell, the court reporter is going to swear you in.
You do solemnly state the testimony you are about to give in this proceeding shall be the truth, the whole truth, and nothing but the truth. So help you God.
Yes.
Good morning, Mr. Parcell. Would you please state your name and your business address for the record?
Certainly. David C. Parcell. 2218 Worchester, W-O-R-C-H-E-S-E-R Road, Midlothian, M-I-D-L-O-T-H-I-A-N, Virginia, 23113.
By whom are you employed and in what capacity?
I am employed by Technical Associates Incorporated, as a principal and senior economist.
And as part of your employment, did you hire on as a consultant in this case?
Yes, I was retained by the utilities division staff to prepare testimony and testify on cost of capital issues.
Have you previously testified before the commission on behalf of commission staff?
Yes.
Can you approximate how many times you have testified on behalf of the commission?
In terms of cases, it would be about 50.
And in the past year, have you served as consultant or an expert witness on behalf of staff?
Yes, I have in a number of cases, perhaps 12 to 15 cases in the past year.
Thank you. As part of your duties in this case, did you prepare exhibits S4 and S5, which are your direct testimony and your surrebuttal testimony? I
did.
And do you have those in front of you today?
I do.
Did you also prepare... a revised Schedule 15, which we have marked as Exhibit S11?
I did.
And do you have that in front of you as well?
Yes.
And what was the reason that you prepared a revised Schedule 15?
A number of questions were sent to me to be prepared to testify on today. In the process of preparing those questions, I realized as was suggested in a couple of questions, that Schedule 15, which is a summary schedule, that's the schedule I used to develop my recommendation for the summary schedule, contained some incorrect numbers. So Schedule 15, corrected, puts the proper numbers in.
And for each of those exhibits, S4, S5, and S11, were those prepared by you or at your direction?
They were.
Other than the changes you made to Schedule 15, do you have any changes or corrections to any of those three exhibits?
I do. One thing I want to move over, verification of a change, but on S4, page 20, S4, page 20, line 15. there's a number there that says 6.79%. Technically, that should be 6.49%. Let me briefly explain that. In the company's rate filings, they had a cost of debt of 6.49%. In the financing filings, which were consolidated with these filings, that filing was submitted a somewhat later date, and a cost rate of 6.79 was used. That was the current rate at that time. So there are two numbers, so to speak, floating around, both of which would be accurate in terms of what they were doing. It's just the time periods. But to be totally accurate on my testimony on page 20, line 15, where I say 6.79, that should be 6.49.
Later, the same paragraph on line 19, 6.79 is correct. because that reflects the financing filing.
Ms. I'm sorry, I didn't catch the last phrase. Mr.
On line 19 of page 20, you'll see a reference to a 6.79 percent. That 6.79 is correct. Ms. Okay. Mr. That's the number from the financing filing, whereas the 649 was from the rate filing.
Ms. Thank you for that clarification. Do you have any other? Mr. So, for that
clarification, on my page 20, it looks like I'm using two different numbers, but both numbers, as currently in context or correct as prepared and presented by the company.
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Agenda
8 items
1
What is covered in the opening remarks and witness swearing‑in?
0:00–46:59
2
How does the witness explain his cost‑of‑capital recommendations and the proposed 70‑30 capital structure?
46:59–2:32:26
3
What is the purpose of the depreciation verification discussion?
2:32:26–3:14:34
4
How does the conversation shift to revenue recovery risk and rate‑shock concerns?
3:14:34–3:48:24
5
What key issues are raised about capital structure, foreign ownership, and low‑income tariffs?
3:48:24–4:55:07
6
What exhibits are being admitted and how is the testimony being verified?
4:55:07–5:35:01
7
How do cash‑flow models, capital‑structure ratios, and IAC/kayak affect the rate base and revenue requirement?
5:35:01–6:29:37
8
What are the remaining procedural steps – briefs, phase‑in proposals, and adjournment?
6:29:37–7:03:45
Speakers
1 identifiedOfficials recognised by voice; public commenters shown as “Speaker N” unless they state their name.
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