Arizona Water Company, Cornman Tweedy Agreement Reached

Rehearing Application Highlights:

To this point, the Company notes that every item on the Commission’s February 2017 Open Meeting agenda has resulted in a signed and docketed order, except for the Commission’s decision on this matter. Because the Commission’s April 2017 decision to reconsider this matter preceded the service of a written order reflecting the February decision, it is procedurally deficient…..

Apart from the procedural issues, the Commission abused its discretion in the April Open Meeting by failing to meet the substantive standard governing the rescission, modification, and amendment of prior CC&N decisions under A.R.S. §40-252. Arizona courts have made clear that ‘ the exercise of the Commission’ s power [to rescind, alter , or amend a certificate of convenience and necessity once it has been granted] requires showing due cause for such action – an affirmative s owing that the public interest would thereby be benefited.” Ariz. Corp. Comm. v. Tucson Ins. and Bonding Agency, 3 Ariz. App. 458, 463, 415 P.2d 472, 477 (Ct. App. 1966).

After a highly questionable move on the part of Arizona Corporation Commissioner Andy Tobin, Commission staff signed a settlement agreement between Arizona Water Company and Cornman Tweedy 560, LLC.

The agreement will likely be approved by three of the five Corporation Commissioners: Tobin, Tom Forese, and Boyd Dunn.

In February, the Commission approved Arizona Water Company’s Certificate Of Convenience And Necessity (CC&N), in a 3-2 vote. In Arizona, companies must obtain a CC&N through the Commission in order to provide water in a defined service area.

Commissioners Andy Tobin, Doug Little, and Bob Burns voted in favor of Arizona Water.

An order memorializing the CC&N approval should have then been signed by the commissioners. However, for some reason that did not happen. Instead “almost two months later, on March 29, 2017 – just seven days before the April 5 Open Meeting – the Commission filed the April Open Meeting agenda in this docket listing reconsideration of that February 7 decision as an item for discussion,” wrote Arizona Water Company’s attorney Meghan H. Grabel in a request for a rehearing.  As the ADI reported in June:

In its application, Arizona water accused the Commission of violating its due process rights because of Tobin’s maneuver.

At its April 5, 2017 Open Meeting, the Commission then voted to reopen and reconsider its February 2017 decision. According to the application, “The impetus for reconsidering the February decision was not new evidence related to the CC&N dispute, but the reservations of a single Commissioner who had voted in the majority and believed that “the issue of the CC&N needs a deeper dive.”

Tobin’s “deeper dive” essentially vacated the February 7, 2017, vote to approve the December 22, 2016 Recommended Opinion and Order in Arizona Water’s favor and denied Cornman Tweedy’s request to delete the portion of Arizona Water’s CC&N that includes property owned by Cornman Tweedy.

Arizona Water has been engaged in a legal battle with Cornman Tweedy 560 L.L.C. over the CC&N for years. Tobin’s move appeared to prolong that fight in favor of Cornman Tweedy, which is controlled by the powerful Robson family.

Arizona Water was forced back to the negotiating table with Cornman Tweedy.

Arizona Water’s attorney, Meghan Grabel, wrote in the application for rehearing: “Arizona Water will pursue settlement conversations with Cornman Tweedy in good faith as the Commission has ordered and as the Company has done on several occasions during the more than 13 year duration of the proceedings in this docket. Nevertheless as explained in detail below, the Commission’s April 201 7 determination to rescind its February decision, order the parties to attempt settlement as if the February decision had never happened, and formally rule on the reconsideration 60 days later was both procedurally and substantively deficient as a matter of law. Arizona Water is therefore compelled to file this Application under A.R.S. § 40- 253 to preserve its right to appeal the Commission’s action.”

2018 1st Report (4th Quarter)
Committee Date Amount
2018 Contributions for – Robson, Ed
Forese For Arizona 12/12/2016 $1,500.00
2018 Contributions for – Robson, Mark
Forese For Arizona 12/12/2016 $500.00
2018 Contributions for – ROBSON, ROBERT D
Forese For Arizona 12/21/2016 $500.00
2018 Contributions for – Robson, Steven S.
Forese For Arizona 12/09/2016 $500.00
2018 Contributions for – TAYLOR, KARRIN
Forese For Arizona 11/17/2016 $500.00
2018 Contributions for – ROBSON, EDWARD
Ducey for Governor 12/29/2016 $5,000.00
2018 Contributions for – ROBSON, ED
Yarbrough/House 12/22/2016 $500.00
Vote Mesnard 2016 12/22/2016 $500.00
Contributions for – Boyd Dunn 2016
Contributor Date Amount
Robson, Edward $5,000
Robson, Kim A $2,500
Robson, Linda $4,500
Robson, Mark E $4,500
Robson, Robert D $2,500
Robson, Steve $4,500

The public’s perception of the Commission has been negative due to its efforts to prevent transparency in campaign contributions from Arizona Power Service, the state’s largest utility company. Burns has been trying to get APS to reveal the beneficiaries of their campaign contributions in the 2014 election. In August 2016, Burns filed subpoenas for the production of records and information relating to a range of expenditures from 2011 through 2016 by APS and its parent company Pinnacle West Capital Corp. including information concerning marketing and advertising expenditures, charitable donations, lobbying expenses, contributions to 501(c)(3) and (c)(4) nonprofits and political contributions.His fellow commissioners continue to deny him support in his fight for transparency.

Under the agreement, 14 terms were specified including:Arizona Water Company will keep its CC&N to provide public utility water service within the disputed area.

For development that occurs at the Cornman Tweedy property, Arizona Water will refund to Cornman Tweedy, or its designee, all amounts paid for infrastructure and development.

The agreement establishes how refunds of development costs to Cornman Tweedy will be made under Main Extension Agreements to bring water service to the Cornman Tweedy property.

Arizona Water agrees to waive any requirements of an off-site facilities fee for development on the Cornman Tweedy property.

Arizona Water will have the right of first refusal to purchase reclaimed water from Picacho Sewer Company for use on the Cornman Tweedy property.

Arizona Water will also provide non-potable water service to customers on the Cornman Tweedy property from Arizona Water’s wells upon request.

Both parties agreed to work collaboratively and meet on a quarterly basis to coordinate development at the Cornman Tweedy property.

Arizona Water shall provide recovered Central Arizona Project [CAP] water to its General Service customers located on the Cornman Tweedy property.

Arizona Water shall make recovered CAP water available to Cornman Tweedy, or its designee in a specified amount for a set period.

If requested by Picacho Water Company, Arizona Water will install a one-way emergency service connection from Arizona Water’s Pinal Valley System to Picacho Water Company’s system.

Both parties agreed they, and any of their affiliates, will not provide water service in areas where there is a final and unconditional CC&N.

The settlement agreement is contingent upon the Corporation Commission confirming various CC&Ns are final and not contingent on any other filing requirements.

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