Utility regulators on Tuesday approved a deal that allows Arizona Water Co. to keep a lucrative portion of its service territory in Pinal County and prevents a rival company from taking over the disputed territory.
The commissioners had considered granting the territory to a competitor owned by Ed Robson, a developer and political donor to one of the commissioners. But an administrative-law judge and commission staff had warned that would be unconstitutional, and the settlement avoided such a transfer of territory.
The Arizona Corporation Commission, under different commissioners, had granted Arizona Water the territory in 2004. Attorneys for Cornman-Tweedy have challenged that decision unsuccessfully since 2005.
Cornman-Tweedy is controlled by Robson, a developer who builds housing communities and runs multiple water and sewer companies. Those companies wanted to develop a portion of Arizona Water’s territory and serve it with their own water company.
Robson Communities officials donated $23,500 to Corporation Commissioner Boyd Dunn’s 2016 election, and $3,000 to commission Chairman Tom Forese for his run at state treasurer this year. Campaign records show Forese has returned the money.
Service territories, formally known as Certificates of Convenience and Necessity, are a property right enshrined in the state Constitution. Granting them, deleting them and transferring them is usually no small decision.
At his first meeting as a commissioner last year, Dunn proposed deleting Arizona Water’s CC&N in the disputed territory. The motion did not pass, but a series of questionable maneuvers at the commission led to the parties reaching a settlement agreement that the commissioners approved Tuesday on a 4-1 vote.
When Dunn’s proposal failed in February 2017, the normal procedure wasn’t followed and an official commission order on the matter was never signed or placed in the public case record, which is the regular process.
Instead, the commissioners brought it back for a revote two months later, despite protests from Arizona Water Co.’s attorney.Then they directed the companies to try and settle the matter.
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Commissioner Robert Burns was the lone vote against the deal Tuesday, and he cited the procedural irregularities.
“I believe this issue was decided on Feb. 7 (2017) when we had a vote,” Burns said. “That process that was followed … in my opinion, forced Arizona Water to the negotiation table, and forced them in a weakened position. It puts a black mark against the commission because we did not follow our normal procedure.”
Dunn said he supported the settlement, in which Arizona Water will maintain the territory but repay Cornman-Tweedy for infrastructure it builds that is used by Arizona Water to provide water service in the area.
Dunn mentioned his initial impression with the case upon joining the commission and the fact it had dragged on so long.
“I was just basically shocked at that,” Dunn said. “This is presenting an opportunity to resolve something.”
Forese said he was happy with the settlement.
“There have been critics of this process,” Forese said. “I will remind everyone it is not the critic that counts. This was done by commissioners duly elected. It was done in transparency. It was not done for one utility or another. It was done in the best interest of ratepayers and the public.”
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