TO: Editors, News Directors

DATE: December 14, 2001

FOR: Immediate Release

Federal Arsenic Limit Subject of December 14 Commission Meeting
To Feature Presentations by State & Federal Agencies

PHOENIX - The new Federal Environmental Protection Agency (EPA) standard for arsenic, a naturally occurring substance in groundwater, will be the subject of a Special Open Meeting at 10:00 a.m. on December 14. The EPA recently tightened the maximum contaminant level standard from 50 parts per billion (ppb) to only 10 ppb.

Arsenic can occur both naturally (organic arsenic) or as a byproduct of business and industry (inorganic arsenic). Organic arsenic can be found in water, air, soil, volcanic rock, plants and animals. The inorganic form of arsenic is used to preserve wood; create, mine or treat metals; and is also added to some paints, dyes and soaps. Arsenic is known to cause health problems.

The lower limit will affect many Arizona water companies. The Arizona Corporation Commission is holding this meeting to help Arizona water companies and the communities served by them better understand the new limit, when it takes effect and the roles of various state and federal agencies.

A Concern for Water Companies

Arsenic is especially prevalent in the Western states and makes its way into the water supply as water percolates down through rock and soil. When groundwater is the primary source of water for a community - as is the case for many small water companies in rural areas - complying with the lower standard will require new, and sometimes costly, treatment methods.

The EPA estimates that approximately 13 million Americans are served by water systems that do not comply with the reduced standard. Jeff Stuck, Safe Drinking Water Section Manager at the Arizona Department of Environmental Quality (ADEQ), estimates that nearly one third of Arizona's water systems subject to the regulation do not meet the new, tighter standard. ADEQ regulates water quality for all water companies in Arizona.

The Arizona Corporation Commission has other regulatory and ratemaking authority for some of the water companies overseen by ADEQ. The Commission is still assessing how many and which of the companies it regulates will be affected by the lower standard. The Commission requires companies to be in compliance with ADEQ standards. The EPA requires companies to comply with the new standard by 2006.

It is important to note that the arsenic standard was initiated by the EPA and will be enforced by ADEQ. The Commission will be involved only to the extent that the water companies it regulates will be required to comply. Some of these companies may come to the Commission to seek approval for rate adjustments, depending upon the costs they incur to comply with the tighter standard.

Health Issues Associated with Arsenic

Information provided by the EPA states that the new rule addresses the long-term, chronic effects of exposure to low concentrations of arsenic in drinking water. A fact sheet on the EPA website states that studies have shown that the ingestion of arsenic can cause adverse health effects, including:

"Cancerous Effects: skin, bladder, lung, kidney, nasal passages, liver and prostate cancer; and

Non-cancerous effects: cardiovascular, pulmonary, immunological, neurological and endocrine (e.g., diabetes) effects." Source: www.epa.gov/safewater/ars

More About the December 14 Meeting

The meeting will be held in the Governor's Reception Room on the second floor of the Executive Tower at 1700 West Washington in Phoenix. The meeting will kick off with presentations on water utility regulation by the Arizona Corporation Commission's Utilities Division staff. The Federal EPA staff will follow with additional information about the arsenic standard. An expert from ADEQ will discuss statewide implementation of the federal regulations. Public comments will be allowed. Please note, however, that the new arsenic standard has already been approved by the EPA. The purpose of Friday's meeting is not to debate the merits of the new regulation but, rather, to discuss issues related to the implementation of the standard in Arizona.

The Commission will discuss identifying cost recovery alternatives for expenses associated with complying with the EPA rule. Capital costs are typically recovered through rate case filings, which frequently are complex and time-consuming for both the affected company and Commission staff. Due to the large number of companies that will be affected by the EPA regulation, it may be appropriate to develop streamlined processes for reviewing cost recovery cases associated with arsenic standard compliance.

Additional Resources

For more information from the EPA, go to the safe drinking water section of the EPA's internet site: www.epa.gov/safewater

Contact the Arizona Department of Environmental Quality at 602-207-2300 or online at www.adeq.state.az.us/environ/water/.