Residents of Robson Ranch in Eloy blame developer, foreign investors for utility 'rate shock'

Residents of an Arizona retirement community who are preparing to see their water and sewage costs double are blaming the foreign investors who bought their local utility company – and the well-known Arizona developer who sold it to them.

The Arizona Corporation Commission voted 3-2 on Wednesday to approve new customer rates for the Picacho Water and Sewer companies, utilities started by The Robson Companies to serve the 55+ Robson Ranch community that opened in Eloy in 2005.

Residents there have enjoyed low water and sewer rates for years due, in large part to subsidies from The Robson Companies, the development company founded by Ed Robson.

According to the administrative law judge overseeing the case, the average resident’s combined water and sewer bill will increase by $76.63 per month in April.

“To raise the rates over 100% is definitely rate shock,” resident Deborah Dorman told the commissioners.

Who is to blame?

In recent months, the commissioners have repeatedly committed to fighting that rate shock, adopting new — and sometimes controversial — rules that they say will prevent utilities from saddling customers with sudden, extreme cost increases.

But the situation in Robson Ranch was different, some regulators argued.

That’s because Picacho Water and Sewer, under Robson’s management, had not sought a rate increase since their inception in the late 1990s, despite rising costs.

Instead, Robson paid for those expenses rather than passing them onto customers.

“There's no disputing that these customers in this system have been having their water, you know, and wastewater rate subsidized,” said Commissioner Kevin Thompson, who voted against the rate increases.

It’s unclear why Robson never sought a rate increase, though its residents suggested it was part of the sales pitch to sell homes at Robson Ranch.

“I was told about water and sewer and the rates being low,” resident Ross Dunfee said. “And that was one of the arguments for buying Robson.”

Residents said the company benefited from that policy by enticing buyers to purchase homes in Robson Ranch with the prospect of low utility rates — until the company sold the utilities to Phoenix-based JW Water in 2024.

“He started the whole thing,” resident Raul Salmon said, referring to Ed Robson.

If Robson had come forward sooner to seek regular, consistent rate increase, they wouldn’t be facing rate shock now, residents argued.

“We're real angry with him about that right now. We are quite, quite frustrated about that,” Dorman said.

The Robson Companies did not respond to a request for comment.

New owner, new rates

JW Water purchased the utilities as a part of a larger transaction by CVC DIF, a Netherlands-based investment firm that purchased JW Water.

The new operators argued the rate increases are needed just to cover the costs of providing safe, reliable water and sewer services to Robson Ranch residents. They said those services couldn’t be sustained by rates last updated in the 1990s.

“Rates that are that old are rarely going to cover a utility's cost of service,” attorney Jay Shapiro, who represents JW Water, said.

Shapiro said the rate increases are only meant to cover the costs to provide services to the community, not cover any expenses related to the sale of Picacho Water and Sewer to JW Water.

And he pointed out that the rates adopted by the commission were vetted by non-partisan commission staff and an administrative law judge who oversaw the case.

A 3-2 majority of commissioners sided with the company.

They argued the commission has a responsibility to ensure utilities are bringing in enough money to sustain themselves.

“The commission's job is not to freeze bills,” Chairman Nick Myers said. “It is to balance financial integrity of the utility, long term system sustainability and rate payer impact.”

Commissioner Rachel Walden, who voted for the rate increase, blamed Robson — and the commission itself — for the rate shock customers are now facing.

Walden said Picacho Water and Sewer were ordered to come before the commission two decades ago to update rates but never did. She said the commission did not have “the tools or resources to have followed up on that 20 years ago.”

“I think that is a gross violation of what they were ordered to do; to go over a quarter of a century and not ever come in for a rate case,” Walden said. “And now here we are with everybody having to make difficult decisions.”

But Robson residents weren’t convinced, arguing the utility’s new owners are driven by profit.

“As much as they say it's not, it's a Dutch company of investors, and their statements clearly say that they're looking to maximize shareholder return,” Dorman said.

In a statement announcing the purchase, CVC DIF Managing Partner Gijs Voskuyl committed to investing in the infrastructure of the Arizona utilities it purchased and providing dependable service to customers.

“We also believe this investment is emblematic of CVC DIF’s focus on high quality infrastructure assets that provide stable long-term cash flows with the opportunity for additional growth and long-term value creation,” he said.

Affordability

All sides agree that rates need to go up in Robson Ranch.

And residents and commissioners blamed Robson for causing the problem in the first place, arguing the community would have faced smaller, consistent rate changes over time if the developer hadn’t neglected to seek a rate increase sooner.

“Not raising rates for 20 to 25 years is generally not a good idea,” Myers said. “This means that when new rates are eventually set, they likely will have a greater increase.”

But residents asked the commission to consider several alternatives, including phasing in the rate increase over the next five years.

According to commission staff, the utility would still be allowed to recover its losses over that time period. That means it could raise rates high enough to cover its losses during years when rates were lowest, which would balloon rates down the line.

The residents’ proposal would have asked JW Water to voluntarily decline to recover those costs, which would significantly reduce that impact.

But the utility was not on board with that idea.

“I believe a phase-in needs to make the company whole, or give it an opportunity to make the company whole,” Shapiro, the attorney said.

Dorman, the Robson Ranch resident, said the company should have thought about that before it purchased the utility.

“We always felt there should have been an increase, but it's hard to understand how it wasn't phased in without them recouping lost revenue and just phased in,” she said. “And I have a hard time grasping the notion that they bought what they bought, they understood what they were buying, and then they can dump it on the current residents.”

Without the utility on board, a phased-in approach would cost residents more.

According to an analysis prepared by the judge overseeing the case, that could result in rates increasing by 300% or more by the fifth year of the phase in period.