Arizona Water Company representatives briefed Sedona’s City Council on Jan. 14 about a pending general rate application filed with the Arizona Corporation Commission (ACC) for the company’s Northern Group, which includes Sedona.

Nick Lou (AWC) summarized the filing: the company asked to reset rates based on a historic test year ending in 2023 and noted the current approved rates were set in 2019. AWC said inflation, capital investments (treatment plants, mains, tanks and booster stations) and increased operating costs were major drivers of its request. The company said the average residential bill impact under the proposal would be approximately $15.62 per month (about 36% for the average single‑family customer after adjusting for current surcharges) and that public comment sessions before the ACC were scheduled for Jan. 29 and March 17.

Council members and members of the public asked detailed questions about proposed surcharges (including a proposed mechanism to address federal mandates such as PFAS treatment), whether future annual adjustment mechanisms could be used, and how rate class and meter‑size billing affect homeowners associations where one meter serves many single‑family units. AWC representatives said surcharges are typically approved as mechanisms by the ACC and require subsequent filings and prudency review before actual dollar charges are applied; the company confirmed PFAS‑related compliance mechanisms were part of its planning and that the company is in design for treatment where required.

Public comment included requests from homeowners and HOA representatives about the equity of tiered rates when an HOA pays for multiple single‑family homes via a single meter. Councilors asked AWC to look into those scenarios; AWC agreed to review customer class and meter‑size impacts on a case‑by‑case basis.

Council discussion concluded without a motion directing staff to submit a formal council comment letter to the ACC. Multiple councilors said they preferred to remain neutral and encouraged residents, HOAs and stakeholders to participate in the ACC public comment sessions. Councilor Kathy said if council were to provide any comment, it should ask the ACC to ensure rates are no higher than necessary; other councilors said they believed individual homeowners and HOAs should voice their concerns directly to the ACC. Annette offered staff assistance if council wished to prepare a letter, but the council collectively chose not to direct staff to file a council position at this time.