Global Water’s proposed Maricopa rate hike is now down to $2.68 a month for the median residential water customer under a settlement filed Tuesday with state regulators.

The proposed settlement, filed Tuesday with the Arizona Corporation Commission, would resolve Global Water Santa Cruz Water Company’s pending water rate case and put new rates into effect Nov. 1, if commissioners approve it.

For a residential customer with a three-quarter-inch meter using about 5,500 gallons of water, the monthly water bill would rise from $35.73 to $38.41, an increase of 7.5%, according to the settlement.

That is a sharp retreat from Global Water’s original request last year, which sought increases of 19.7% for water and 8% for wastewater. In February, the utility told customers its revised request had dropped to about 7%, with new rates unlikely before 2027.

The settlement was signed by Global Water, Arizona Corporation Commission Utilities Division staff and the Residential Utility Consumer Office. It still requires approval by the five-member commission.

Under the agreement, Global Water Santa Cruz’s revenue requirement would be set at $24.5 million, an increase of $2.25 million over test-year revenues. The settlement includes a 9.6% return on equity, a 4.92% cost of long-term debt and a 7.49% weighted average cost of capital.

The agreement also separates the water and wastewater cases. Global Water Palo Verde Utilities Company would withdraw its wastewater rate case and refile in 2027 using a 2026 test year.

As part of that withdrawal, Global Water Palo Verde agreed to seek an increase in a temporary wastewater bill credit tied to premature revenue collection. The credit for the average residential wastewater customer would rise from $1.73 to $2.85 per month when the new Santa Cruz water rates take effect.

The settlement also includes a rate case expense surcharge for Santa Cruz customers, capped at $250,000 total. The surcharge would be collected over three years and could not exceed 35 cents per customer per month. It would automatically end early if the approved expenses are fully recovered before the three-year period expires.

Global Water Santa Cruz also agreed not to file another rate application until after Jan. 1, 2028.

The case has been closely watched in Maricopa, where Global Water is the city’s sole water provider and residents have raised concerns about affordability, base charges and water quality.

The rate case was delayed in December after Global submitted more than 4,300 pages of additional documentation for regulators to review. A hearing had been rescheduled for August, but the settlement, if approved, would avoid further litigation over the case.

The Arizona Corporation Commission has final authority to approve, modify or reject the settlement.