PHOENIX, AZ, Feb. 10, 2014 /CNW/ - GWR Global Water Resources Corp.
(TSX: GWR) and Global Water Resources, Inc. ("Global Water") today
announced approval of the rate case settlement agreement by the Arizona
Corporation Commission ("ACC"), involving seven Global Water regulated
utility subsidiaries. At an open meeting on February 6th, the settlement agreement was unanimously approved by the five ACC
Commissioners. This vote signifies the final milestone in the rate
case, with the settlement agreement becoming effective immediately
following the final Decision and Order which should be completed by the
ACC within a week.
The settlement agreement, which was wholly approved by the
Commissioners, includes the following major terms:
An overall cumulative revenue increase of $4.3 million, or 14%, for
Global Water's utilities based on 2011 test year connections, with the
majority of this revenue increase phased in over two years, beginning
in January 2015.
Full reversal of the imputation of Contributions in Aid of Construction
("CIAC") associated with funds previously received under Infrastructure
Coordination and Financing Agreements ("ICFAs"). The imputation was
required as part of Global Water's last rate case. The reversal
restores approximately $60 million in rate base or future rate base,
which will have the immediate impact of restoring significant
shareholder equity on the balance sheet.
Global Water will not enter into any new ICFAs. Existing ICFAs will
remain in place, but a portion of future payments under the ICFAs will
be used to fund Hook-Up Fees, which are accounted for as CIAC once used
to fund the construction of utility infrastructure.
A 9.5% return on common equity will be adopted.
None of Global Water's utilities may file another rate application
before May 31, 2016. Subsidiaries Santa Cruz Water Company and Palo
Verde Utilities Company may not file for another rate increase before
May 31, 2017.
"Approval of the settlement by the Commissioners, with the full
restoration of shareholder equity that was imputed in the last rate
case, is a significant accomplishment that has considerable and
immediate benefits for our company and customers," said Trevor Hill,
Chairman of the Board. "With the rate case finalized, we can now move
forward to accelerate our simplified, regulated utility strategic
With the final approval of the rate case, Global Water is now reviewing
its dividend policy. As a pure-play water utility, with the divestiture
of its unregulated division, and based on the final rate case decision,
the underlying fundamentals of Global Water warrant consideration of a
dividend. The Board of Directors will consider the company's cash flow,
earnings, working capital requirements, financial position and other
relevant factors prior to making a decision on implementing a dividend.
Once available, the final Decision and Order will be posted on the
Company's website and at the ACC's eDocket website, http://edocket.azcc.gov under the docket number 12-0309. The settlement agreement is currently
already posted in both locations.
About GWR Global Water Resources Corp and Global Water
GWR Global Water Resources Corp. was established to acquire an equity
interest in Global Water. Global Water is a U.S., pure-play, water
resource management company based in Phoenix, Arizona, that owns and
operates water, wastewater and recycled water utilities.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements. These
forward looking statements include, but are not limited to our plans,
objectives, expectations and intentions, and other statements contained
in this release that are not historical facts as well as statements
identified by words such as "expects", "anticipates", "intends",
"plans", "believes", "seeks", "estimates", or the negative of these
terms, or other words of similar meaning. These statements are based
on our current beliefs or expectations and are inherently subject to
significant uncertainties and changes in circumstances, many of which
are beyond our control. Actual results may differ materially from
these expectations due to changes in global political, economic,
business, competitive, market and regulatory factors and other factors
discussed under the heading "Risk Factors" in the Company's most recent
Annual Information Form. We undertake no obligation to publicly update
any forward-looking statement, except as required by law, whether as a
result of new information, future developments or otherwise.
SOURCE: GWR Global Water Resources Corp.
For further information:
Tel: 416.815.00700 ext. 238