PHOENIX, AZ, Jan. 23, 2014 /CNW/ - GWR Global Water Resources Corp.
(TSX: GWR) and Global Water Resources, Inc. ("Global Water") today
announced it received the Recommended Opinion and Order ("ROO") from
the Arizona Corporation Commission ("ACC") Administrative Law Judge
("ALJ") in the rate case involving seven Global Water regulated utility
subsidiaries. The issuance of the ROO by the ALJ is the last major
milestone before the rate case is presented to the ACC Commissioners,
who must approve the settlement before it will take effect.
The ROO from the ALJ follows a proposed settlement agreement between
Global Water and ACC Staff, the Residential Utility Consumers Office
("RUCO"), the City of Maricopa, and others originally announced on
August 13, 2013. The ROO supports the major terms of the settlement
agreement in substance, which include, but are not limited to, the
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 starting
with the first increase 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.
The ACC Commissioners will now review the case and consider the ROO and
proposed settlement for approval at an open meeting on February 6th and 7th, 2014. Although the ROO strengthens the likelihood that the settlement
will be adopted, the Commissioners may approve the settlement as
written, approve it with modifications, or they may reject the
"The Judge's recommendation for approval of the settlement is a crucial
step towards a favorable conclusion of the rate case," said Trevor
Hill, Chairman of the Board. "Approval of the settlement by the
Commissioners will bring this case and related matters to a close
including the treatment of ICFA funds, providing clarity and stability
for our regulated utilities, customers, partners, and investors alike."
Global Water expects to review its dividend policy during February 2014
once it receives the final rate case decision from the ACC. As a
pure-play water utility, with the divestiture of its unregulated
division, and based on the rate case settlement agreement and ROO the
underlying fundamentals of the Company warrant consideration of a
dividend. At that time 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.
The ROO is a public document and is posted on the Company's website and
at the ACC's eDocket website, http://edocket.azcc.gov under the docket number 12-0309.
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: 416.815.0700 ext. 238