Division recommends approval of Highlands Water Company settlement with phased rate increases

At a recorded Utah Public Service Commission hearing on Docket No. 24-010-01, the Division of Public Utilities recommended the commission approve a settlement stipulation that would phase Highlands Water Company's general monthly fee in three steps and the parties' testimony and exhibits were admitted to the record. The Division's utility analyst Tamara Daily told the presiding officer she supports the stipulation and recommended approval.

Marjorie Smith, president and manager of Highlands Water Company, testified that the company, which has operated for just over 60 years, has relied historically on spring water and has recently added wells that tested at over 2,000 gallons per minute. Smith said growth and aging infrastructure have increased costs and expressed concern about how rate increases will affect customers, including retired and fixed-income residents. "We cannot continue to do that," she said, arguing the company should be allowed to pass Weber Basin Water Conservancy District fees through to customers on a per-contract basis rather than averaging them.

Daily described the Division's review and its recommendation in support of the stipulation. "First, effective August 1st, 2026, the monthly general fee will be $8," she said. "Second, effective April 1st, 2027, the monthly general fee will increase to $63. Third, effective April 1st, 2028, the monthly general fee will increase to $75." Daily also explained that customers participating in the Weber Basin Water Conservancy District Water Exchange Program would be charged the district-determined monthly rates for that program as pass-through amounts, with the stipulation's other fees applying.

Daily told the commission the company has not had a general rate increase since 2009 (though tariff changes occurred in 2022) and that the Division converted the company's accounting data from a tax basis to a modified accrual basis for its review, which increased the revenue requirement. The Division noted the proposed phased increases alone were insufficient under current financial models to cover near-term expenditures; the company represented it expects to obtain four private loans to mitigate the deficit and has historically secured capital through private loans or selling water rights. The stipulation does not include a capital reserve account requirement.

Procedurally, the presiding officer admitted the company's filed application, exhibits and testimony into the record pursuant to the settlement language and admitted the Division's comments and exhibits (including DPE-1). The record includes statements that some filed information is designated confidential; the Division and presiding officer instructed parties to alert the bench before disclosing any confidential or highly confidential material so the hearing could be closed if necessary.

The transcript of this hearing shows the Division recommended approval and the evidentiary materials were entered; it does not record a final commission vote approving the rate changes. The presiding officer closed the session and adjourned the hearing; next steps would be a formal commission determination outside the record of this proceeding if and when the commission issues an order.