Valley Pioneers seeks ACC OK to use debt proceeds to buy wells

The Valley Pioneers Water Co in Golden Valley needs to go through some regulatory hoops before it can buy a water system from Phelps Dodge Bagdad Inc.

near Chloride.

Valley Pioneers General Manager John Clayton said he expects the Arizona Corporation Commission to decide by the end of this month whether to approve the sale.

The additional wells will expand the capacity for Valley Pioneers and enable the member-owned company to serve customers of the thirsty Chloride Domestic Water District.

Valley Pioneers filed an application with the Arizona Corporation Commission for an order authorizing the water company to use long-term debt proceeds to buy the five wells from Phelps Dodge.

The sale agreement requires Valley Pioneers to provide water to the Equatorial Mineral Park Mine, sold recently to Mercater Minerals.

The water company, which serves 24 square miles, 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, Clayton said.

He added escrow is scheduled to close July 31.

"We feel the sooner this will happen, the better the (Golden Valley) community will be," Clayton said.

Clayton said the purchase will enable Valley Pioneers to expand its numbers of wells from four to nine and increase pumping capacity from 500 to 5,500 gallons per minute.

Valley Pioneers has 1,800 service connections, with the typical household using 233 gallons of water a day in the winter and 344 gallons a day in the summer.

The expansion will not affect Valley Pioneers' rates, Clayton and board President Marc Glawson said.

"It's going to really enable us to give our customers a good supply of water, so summertime does not have to be a problem," Glawson said.

Clayton said Chloride is asking for as much as 100 acre-feet of water a year from Valley Pioneers.

Valley Pioneers pumped 164 million gallons in 2002, which is the same as 540 acre-feet.

The 100 acre-feet is the tentative proposal, said John Thompson, president of the board of the Chloride district.

He said the district has two wells with limited capacity.

Chloride has about 200 customers who use around 9 million gallons of water a year, Thompson said.

"We haul water during most of the year, very heavily during the summer months," he said.

"We can barely produce about 55 percent of our needs, and we have to haul about 45 percent during the summer months."