TO: EDITORS, NEWS DIRECTORS

DATE: January 25, 2000

FOR: IMMEDIATE RELEASE

Commission Decision Called a Win for All Parties

Phoenix, AZ -- Today the Arizona Corporation Commission unanimously approved a plan that will allow Central Arizona Project (CAP) Water to be used in the Sun Cities. Commission Hearing Officer Jerry Rudibaugh had released his recommendations earlier this month. With only minor adjustments and an amendment proposed by Commissioner Mundell, the matter was passed by a 3 - 0 vote.

The measure is intended to reduce reliance on groundwater as the sole source of water serving the Sun Cities area. At present, groundwater is pumped by Citizens Utilities to serve commercial and residential customers. Today's action laid the groundwork for further cost studies and firm estimates on a plan to use CAP water on golf courses in the community.

A task force was formed in 1997 to study the most cost-effective and reasonable means of utilizing CAP water. Task force representatives were given an opportunity to speak at the Commission's Open Meeting. Task force representatives who spoke in favor of the measure included: Robert Jones, director of the Sun City West Governing Board; Robert Briscoe, President of the Sun City Recreation Centers; Blaine Donaldson, President of the Sun City Homeowners Association, and Phil Garner, President of the Property Owners and Residents Association of Sun City West.

Craig Marks, attorney for Citizens Utilities addressed the Commissioners stating: "This is the culmination of a long process and I believe the proposal before you is a win for all parties." Marks added that he supported Commissioner Mundell's amendment. Brad Hill, a hydrogeologist and Water Resources Manager for the City of Peoria, spoke in favor of the proposal saying: "I support any effort to move away from mining groundwater."

Commissioner Mundell's amendment set specific time frames for the next steps in the process. Citizens Utilities is to supply preliminary designs and updated cost estimates within the next 60 days. The Commission and other parties will then have 60 days in which to file "comments/objections/recommendations regarding the preliminary design/updated cost estimates," according to the amended order. The order further specified that the utility will have another 30 days to file their response to the above filings. Finally, the amended order specified "that the Hearing Division shall within another 30 days set the matter for hearing or submit a recommended Opinion and Order for Commission consideration."

Prior to taking a vote, there was a discussion, which led to minor phrasing changes that will be included in the Final Order. Commissioner Mundell prefaced his vote by saying: "The people here today are to be commended for their efforts to protect our groundwater for our children, grandchildren and future generations." He also explained that his amendment is designed to "ensure that customers are not subject to unrealistic or extravagant rate increases in the future."

Commissioner Jim Irvin also thanked the participants, adding: "As you all know, I have been extremely interested in this program over the past year. This allotment of CAP water is but a small drop of the total allotment that is used by the consumers in the Northwest Valley and we have to be cognizant of that. Therefore, knowing that we had the discussion that this is merely a concept and that options will be put under very close scrutiny, I can support the order."

Finally, Chairman Carl Kunasek said he "would like to thank all the people who worked so hard on this. I am glad to see that the citizens of Sun City recognize the importance of groundwater protection." After today's proceedings, Chairman Kunasek offered additional remarks. "When I took office in 1995, I recognized that we must assure the availability of CAP water through the proper funding of the CAP allocation subscription costs. This action today is a big step toward that future availability."