Valley Pioneers faces hearing on proposal to buy water system

A proposal by a Golden Valley water cooperative to buy a water system from a mining company will be the subject of a hearing Aug.

26 before the Arizona Corporation Commission in Golden Valley.

The ACC scheduled an evidentiary hearing for 10 a.m.

that day on the application from Valley Pioneers Water Co.

to use a previously approved federal loan to buy a water system from Phelps Dodge Bagdad Inc.

near Chloride.

The meeting will be held in the Golden Paradise Landowners building, state Route 68 and Verde Road.

"We've got to argue our case," said John Clayton, Valley Pioneers Water Co.

general manager.

After the hearing, an administrative law judge "will take some time to review the full record and make a recommendation," commission spokeswoman Heather Murphy said.

A commission staff report favors the Valley Pioneers' application subject to 10 conditions.

Valley Pioneers, which serves approximately 1,700 customers in its 24-square-mile jurisdiction, applied for the expansion to increase its capacity and serve customers in the thirsty Chloride Domestic Water District.

Clayton said Valley Pioneers can live with several recommendations, but expects the company that bought Equatorial Mineral Park Inc., Mercator Minerals, to object to many of them.

Under the application, Valley Pioneers would supply water to the copper mine.

"Equatorial has agreed to about all they are going to agree to," Clayton said.

"I think they have conceded all they are willing to concede."

Mercator officials could not be reached for comment Thursday.

Staff recommendations include:

• Requiring Mercator to be responsible for 65 percent of the capital costs for replacing and repairing well pumps and motors, booster pumps, transmission mains and storage tanks.

A licensing agreement reserves 1,300 gallons of water per minute for the mining company out of the total of 2,000 gallons per minute in well production.

• Requiring Mercator to pay 100 percent of the capital costs for repairing and replacing equipment that is outside of Valley Pioneers' service area.

• Requiring Valley Pioneers to reduce Mercator's capital costs if the water company supplies water through its 16-inch main to another entity located outside the service area.

For example, the Chloride district is seeking to reserve 100 acre-feet of water per year, approximately 62 gallons per minute.

In that case, Mercator's share of the capital costs outside the service area would be about 95 percent.

• Subjecting approval of the water system sale to Valley Pioneers to assurances that all five wells do not exceed the contaminant levels for drinking water under state standards.

Valley Pioneers obtained a $1.3 million loan from the Rural Development office of the U.S.

Department of Agriculture to pay for the wells.

The loan also will pay for installing two booster stations and water transmission lines to Mineral Park, and for expanding the current water system.

The wells cost $650,000, and the remainder of the loan will pay for other infrastructure.