12/8/2012 1:03:00 PM Commentary: Montezuma Rimrock Water Co. needs new management
John Dougherty Resident of Rimrock
The Montezuma Rimrock Water Company sent a Dec. 1 letter to its 200 customers stating it is finally providing water that meets arsenic drinking water standards.
It took MRWC seven years to meet the standard.
Why did it take so long?
For years, MRWC claimed it needed water from a controversial well it drilled in 2006 to operate the Arsenic Treatment Facility (ATF).
But a county requirement that MRWC comply with the county's Water Code prevented the company from using Well No. 4. Unable to use Well 4 and faced with violating an Arizona Department of Environmental Quality Consent Order Nov. 30 deadline to have the ATF operating, MRWC simply turned to its existing wells to activate the arsenic treatment system.
Rather than activate the system years ago, MRWC sacrificed its customers' health in a misguided effort to bring Well 4 on line.
MRWC wanted Well 4 to provide additional water because its current wells can only provide adequate supply to about 90 homes.
Despite knowing the water supply constraint, MRWC doubled its customer base in the mid 2000s to more than 200, leaving the entire community with inadequate fire protection. MRWC collected a $2,000 nonrefundable hookup fee from each new connection.
In July 2006, MRWC drilled Well 4 in a residential neighborhood, where most homes are served by private wells. MRWC failed to obtain a commercial zoning variance prior to drilling the well, thereby avoiding notifying immediate neighbors that the company was installing a 400-foot, high-capacity well.
The company also located the well in violation of the Yavapai County Water Code 50-foot setback from neighboring properties. MRWC submitted a misleading site plan to the County to obtain a permit to drill the well, showing setbacks greater than 50 feet.
At the same time, MRWC violated Arizona Corporation Commission regulations by failing to obtain Commission approval to borrow $32,000 to purchase the property for the Well 4 site. MRWC then covered up the long-term debt by submitting false annual reports to the Commission for years.
Over the next few years, MRWC used ratepayer funds to pay for most of the cost of purchasing the land and spent a substantial amount of ratepayer money to construct the well and supporting infrastructure, including an electrical panel and a six-foot high chain link fence topped by barbed wire.
In 2011, MRWC installed a 2,500-foot pipeline from Well 4 to the ATF site the company claims cost more than $68,000. MRWC's contractors trespassed on private property and destroyed trees during pipeline construction.
After more than two years of litigation in Yavapai County Superior Court challenging the legality of Well 4, a Yavapai County hearing officer on Nov. 13 entered a judgment against MRWC. The judgment requires the company to return the Well 4 parcel to vacant land by Dec. 20 or be fined $10,000.
The judgment came at the same time MRWC was facing the Nov. 30 ADEQ Consent Order deadline to activate the ATF or face substantial fines. That's when MRWC finally activated the ATF by using water from an existing well.
MRWC is now seeking to inflict more damage on its customers by requesting a 115 percent rate increase from the Corporation Commission to cover expenses it has not already charged ratepayers for its expenditures on developing Well 4 and building a pipeline to nowhere.
The rate hike would also cover the cost of installing two, 28-foot high, 30,000-gallon water tanks the company wants to install to make up for the lost production capacity from Well 4.
MRWC's customers should not be forced to pay for any expenses related to Well 4 and the pipeline. In fact, MRWC should be required to refund ratepayers for money the company has already spent on the illegal well and useless pipeline.
MRWC's management has displayed complete disregard for its customers' health and financial welfare. The company has disregarded county zoning regulations and ignored ACC regulations.
The Corporation Commission grants utilities the right to operate a monopoly through a Certificate of Convenience and Necessity.
MRWC has abused its right to serve the public and the ACC should revoke the Certificate of Convenience and Necessity and install new management.
Posted: Tuesday, December 11, 2012
Article comment by:
As a recent cancer victim, I have become very aware of how epidemic cancer is in this subdivision served by MRWC, cancer that is very likely caused by the high levels of arsenic in the water we've been using. It makes me very angry that this suffering could have been prevented by putting the arsenic treatment facility in place years ago. I speak for those who have died of cancer here and who are presently suffering from it.
Posted: Tuesday, December 11, 2012
Article comment by:
John Dougherty's report on the facts in this case is informative and brings perspective to the years of MRWC malfeasance. It adds value to Ayers report on the company current predicament. The choice is clear the Arizona Corporation Commission should revoke the Certificate of Convenience and Necessity and install new management. To those users of MRWC services the bottom line: MRWC isn't in a position to provide a cost effective solution for it's customers. MRWC’s isolated system is more expensive to build and operate than neighboring AWC no matter how badly the Company is run. Simple reason, the Economy of SCALE.
It is more cost effective to run a water company for 1500 customers than it is to run one with 200 customers especially when you need expensive Arsenic Treatment. The answer is to consolidate the two systems for efficient operation. That is why Arizona Corporation Commission Policy favors consolidation of utility services over multiple small operators. The sooner this fact is recognized the sooner MRWC’ customers will get the cost effective robust water service they deserve.
The water rates for neighboring Arizona Water Company (AWC) customers are already cheaper than MRWC. And AWC provides water that MEETS the Arsenic standards already as they have since 2006!.