Ariz. Rev. Stat. § 40-370 – Water utility surcharges to recover operating costs; notice; definition

A. Subject to the limitations provided in subsection D, the commission shall authorize water utilities to recover increases in specific operating costs by means of a surcharge on water sales and to reduce rates when those specific operating costs decrease. The operating costs that may be considered in this procedure are limited to specific, readily identifiable costs that are subject to the control of another person, including the cost of purchasing electricity or gas, the cost of purchasing water from another utility, municipality or district and the payment of ad valorem taxes or any similar tax or assessment levied on the water utility. The surcharge shall not exceed ten per cent of current rates.
B. The water utility shall file written notice of a surcharge or rate decrease pursuant to this section with the commission, clearly advising the commission of:
1. 1. The specific operating cost being considered for the rate decrease or recovery by the surcharge.
2. 2. The amount of the operating cost being considered for the rate decrease or recovery by the surcharge.
3. 3. The timing and method of cost recovery or rate reduction.
C. The water utility shall also deliver to each customer with the customer's next bill for service a notice of the proposed surcharge or rate reduction. This notice to customers shall include the following information:
1. 1. The information prescribed by subsection B.
2. 2. The customer's right to comment on the proposed surcharge or rate reduction.
3. 3. The address and telephone number of the commission.
D. A surcharge imposed by this section is effective thirty days after the date on which the water utility files the written notice with the commission, unless within that time the commission in its discretion adjusts or denies the surcharge or determines that further investigation of the surcharge is required. The commission shall notify the water utility in writing of a decision to adjust or deny the surcharge or to further investigate the appropriateness of the surcharge. If the commission determines that further investigation of the surcharge is required, the commission may conduct a hearing regarding the appropriateness of the surcharge. If the commission does not issue a decision within one hundred twenty days after the date the water utility files the written notice, the surcharge is effective without further action.
E. For purposes of this section, "water utility" means a public service corporation that is subject to the commission's jurisdiction and that engages in supplying water utility service in this state.