Editor, Casa Grande Dispatch:
The Arizona Supreme Court has finally settled the controversy regarding the legality of setting uniform rates for consolidated water districts in the October 2021 ruling Sun City Home Owners Ass'n v. Arizona Corp. Commission. The Sun City HOA claimed that the setting of uniform rate was an act of discriminatory pricing, violating Article 15, Section 12 of the Arizona Constitution. After being compared to the other communities serviced by EPCOR for municipal water services, Sun City has historically had some of the lowest operational costs. Most municipalities experienced a decrease in rates, while Sun City was the exception. The increase in the price of water service offsetting the cost to other communities functions as cross-subsidy.
The state Supreme Court did not rule in favor of the HOA, but there are further ethical and economic concerns to evaluate. For one, the rate-setting power conferred by the state Constitution (Article 15, Section 3) to the ACC mirrors the congressionally allotted privilege of chevron deference at the federal level. This judicial doctrine does differ from the powers allocated in the Arizona Constitution; chevron provides judicial power to bureaucratic agencies; in contrast, the state permits quasi-legislative authority, a rule-making power that is inappropriate for a bureaucratic agency to wield. Hence why we have a legislature. Economic exchange determines prices (the law of supply and demand) and not the edicts of lawmakers or bureaucratic agencies. Town governments and EPCOR need to negotiate the rates, not state agencies.