COMMISSION NEWS |
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ARIZONA CORPORATION COMMISSION |
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TO: EDITORS, NEWS DIRECTORS |
DATE: April 7, 1998 |
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FOR: IMMEDIATE RELEASE |
CONTACT: Stephen Ahearn (602) 542-0844 |
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Corporation Commission Establishes Water Task Force |
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PHOENIX, AZ/ April 7, 1998 - On Monday, the Arizona Corporation Commission moved a step closer to implementing its comprehensive water policy. The Commission established a Water Task Force that will address federal environmental initiatives that have substantially increased the cost of supplying potable water to consumers. "Sound water management," said Commissioner-Chairman Jim Irvin, "is essential to meet the challenge of a rapidly growing population in an area where resources are scarce." |
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The task force - which will include representatives from consumer groups, industry members and regulatory officials - will have to tackle a variety of issues to ensure that improved water quality, conservation and system reliability are safeguarded into the next century. Commissioner Renz Jennings noted that the establishment of the task force will enforce the "value of clear, open dialogue." |
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The practical result of recent changes to the Safe Drinking Water Act is that increased operation, construction and maintenance costs of water systems will be passed on to consumers. For large municipal systems (unregulated by the ACC), these costs can be easily absorbed by the large number of individual consumers, with minimal impact on rates. |
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However, the vast majority of private water companies regulated by the Commission are small systems serving rural areas. "One main problem," notes Commissioner-Chairman Irvin, "is that the infrastructure of Arizona's private water industry is so fractured, many small and medium-sized systems cannot afford the capital expense or provide the technical expertise needed to comply with federally mandated programs." The Commission has already determined that a move toward consolidation is necessary, and the task force will look to establish various incentive programs to foster such activity. |
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Water conservation is central to the Commission's strategy for creating mechanisms for private water businesses to manage costs. The 1980 Groundwater Management Act resulted in water management plans for regions in Arizona where overdraft is most significant. Consequently, water delivered through the Central Arizona Project (CAP) has become more significant in accommodating growth by reducing the reliance on limited groundwater. "Incorporating private systems into Arizona's long-term water management plans is essential to guarding against the illusion that these companies have no significant impact on the water programs of this state," said Commissioner-Chairman Irvin. The task force will have to determine a fair and reasonable mechanism allowing companies to recover expenditures for mandatory conservation programs, especially in developing areas where CAP allotments are essential for growth. |
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An important element of the Commission's commitment to conservation involves a more efficient delivery of water by private companies. Of the roughly 1,000 water systems in Arizona, over 400 are regulated by the Corporation Commission, and nearly 80% of these are considered "small" under parameters set by the U.S. Environmental Protection Agency. Water industry trends in other regions throughout the United States confirm that consolidation leads to operating efficiency. Pennsylvania and California have already passed legislation to provide utilities acquiring small non-viable water systems with incentives to consolidate. |
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