Ariz. Admin. Code § 14-2-402

Current through Register Vol. 30, No. 21, May 24, 2024

Section R14-2-402 - Certificates of Convenience and Necessity for Water Utilities; Extensions of Certificates of Convenience and Necessity for Water Utilities; Abandonment, Sale, Lease, Transfer, or Disposal of a Water Utility; Discontinuance or Abandonment of Water Utility Service

A. In this Section, unless otherwise specified:

1. "Applicant" means a person who submits an application to obtain a Certificate of Convenience and Necessity to construct water utility facilities or operate as a water utility or to extend the service area under an existing Certificate of Convenience and Necessity held by the person.

2. "CC&N" means Certificate of Convenience and Necessity.

3. "Commission" means the Arizona Corporation Commission.

4. "Contiguous" means in actual contact, touching, such as by sharing a common border.

5. "Extension area" means the geographic area that an applicant is requesting to have added to the applicant's existing CC&N service area.

B. Application for a new CC&N or extension of a CC&N

1. Any person who desires to construct water utility facilities or to operate as a water utility shall, prior to commencing construction of utility facilities or operations, file with the Commission an application for a CC&N and obtain Commission approval.

2. Any utility that desires to extend its CC&N service area shall file with the Commission an application for a CC&N extension.

3. Before filing an application for a CC&N or a CC&N extension, a person shall provide written notice of the person's intention to file the application to each person who owns land within the proposed service area or extension area and who has not requested service. Each written notice to a landowner shall include, at a minimum:

a. The legal name, physical address, mailing address (if different), and telephone number of the intended applicant;

b. The approximate date by which the application will be filed;

c. The type of services to be provided if the application is approved;

d. The physical addresses and toll-free telephone numbers, in Phoenix and Tucson, for the Consumer Services Section of the Commission; and

e. The following information:

i. That the recipient is a property owner within the proposed service area or extension area;

ii. That if the application is granted, the intended applicant will be the exclusive provider of the specific services to the proposed service area or extension area and will be required by the Commission to provide those services under rates and charges and terms and conditions established by the Commission;

iii. That a CC&N does not prohibit persons from providing services only to themselves using their own facilities on their own property, although other applicable laws may restrict such activity;

iv. That the application is available for inspection during regular business hours at the offices of the Commission and at the offices of the intended applicant;

v. That the Commission will hold a hearing on the application;

vi. That the landowner may have the right to intervene in the proceeding and may appear at the hearing and make a statement on his or her own behalf even if the landowner does not intervene;

vii. That the landowner may contact the Commission for the date and time of the hearing and for information on intervention;

viii. That the landowner may not receive any further notice of the application proceeding unless requested; and

ix. That the landowner may contact the intended applicant or the Consumer Services Section of the Commission if the landowner has any questions or concerns about the application, has any objections to approval of the application, or wishes to make a statement in support of the application.

4. Within 10 days after filing an application for a CC&N or a CC&N extension, an applicant shall provide written notice of the application to the municipal manager or administrator of each municipality with corporate limits that overlap with or are within five miles of the proposed service area or extension area. Each written notice shall include, at a minimum:

a. The applicant's legal name, mailing address, and telephone number;

b. The date the application was filed;

c. The type of services to be provided if the application is approved;

d. A description of the requested service area or extension area, expressed in terms of cadastral (quarter section) or metes and bound survey;

e. The Commission docket number assigned to the application; and

f. Instructions on how to obtain a copy of the application.

5. Each application for a new CC&N or CC&N extension shall be submitted in a form and number prescribed by the Commission and shall include, at a minimum, the following information:

a. The applicant's legal name, mailing address, and telephone number;

b. If the applicant will or does operate the utility under a different business name, the name under which the applicant will be doing business;

c. The full name, mailing address, and telephone number of a management contact for the applicant;

d. The full name, mailing address, and telephone number of the attorney for the applicant, if any;

e. The full name, mailing address, and telephone number of the operator certified by the Arizona Department of Environmental Quality who is or will be working for the applicant;

f. The full name, mailing address, and telephone number of the onsite manager for the applicant;

g. Whether the applicant is a corporation, a partnership, a limited liability company, a sole proprietor, or another specified type of legal entity;

h. If the applicant is a corporation, the following:

i. Whether the applicant is a "C" corporation, an "S" corporation, or a non-profit corporation and whether the corporation is domestic or foreign;

ii. A list of the full names, titles, and mailing addresses of each of the applicant's officers and directors;

iii. A copy of the applicant's certificate of good standing issued by the Commission's Corporations Division;

iv. Unless the applicant is applying for a CC&N extension, a certified copy of the applicant's articles of incorporation and by-laws; and

v. If the applicant is a for-profit corporation, the number of shares of stock authorized for issue and, if any stock has been issued, the number of shares issued and date of issuance;

i. If the applicant is a partnership, the following:

i. Whether the applicant is a limited partnership or a general partnership and whether the partnership is domestic or foreign;

ii. The full names and mailing addresses of the applicant's general partners;

iii. The full names, mailing addresses, and telephone numbers of the applicant's managing partners;

iv. Unless the applicant is applying for a CC&N extension, a copy of the applicant's articles of partnership; and

v. If the applicant is a foreign limited partnership, a copy of the applicant's certificate of registration filed with the Arizona Secretary of State;

j. If the applicant is a limited liability company, the following:

i. The full names and mailing addresses of the applicant's managers or, if management is reserved to the members, the applicant's members;

ii. Unless the applicant is applying for a CC&N extension, a copy of the applicant's articles of organization;

k. The legal name and mailing address of each other utility in which the applicant has an ownership interest;

l. A description of the requested service area or extension area, expressed in terms of cadastral (quarter section) or metes and bound survey;

m. The name of each county in which the requested service area or extension area is located and a description of the area's location in relation to the closest municipality, which shall be named;

n. A complete description of the facilities proposed to be constructed, including a preliminary engineering report with specifications in sufficient detail to describe each water system and the principal components of each water system (e.g., source, storage, transmission lines, distribution lines, etc.) to allow verification of the estimated costs provided under subsection (B)(5)(o) and verification that the requirements of the Commission and the Arizona Department of Environmental Quality can be met;

o. The estimated total construction cost of the proposed offsite and onsite facilities, including documentation to support the estimates, and an explanation of how the construction will be financed, such as through debt, equity, advances in aid of construction, contributions in aid of construction, or a combination thereof;

p. Documentation establishing the applicant's financial condition, including at least the applicant's current assets and liabilities, an income statement, the applicant's estimated revenue and expenses for the first five years following approval of the application, and the estimated value of the applicant's utility plant in service for the first five years following approval of the application;

q. The rates proposed to be charged for services rendered, shown in the form of a proposed tariff that complies with Commission standards;

r. The estimated annual operating revenues and expenses for the first five years of operation for the requested service area or extension area, expressed separately for residential, commercial, industrial, and irrigation services, and including a description of each assumption made to derive the estimates;

s. A detailed description of the proposed construction timeline for facilities, with estimated starting and completion dates and, if construction is to be phased, a description of each separate phase of construction;

t. A copy of any requests for service from persons who own land within the proposed service area or extension area, which shall identify the applicant by name;

u. Maps of the proposed service area or extension area identifying:

i. The boundaries of the area, with the total acreage noted;

ii. The land ownership boundaries within the area, with the acreage of each separately owned parcel within the area noted;

iii. The owner of each parcel within the area;

iv. Any municipality corporate limits that overlap with or are within five miles of the area;

v. The service area of any public service corporation, municipality, or district currently providing water or wastewater service within one mile of the area, with identification of the entity providing service and each type of service being provided;

vi. The location within the area of any known water service connections that are already being provided service by the applicant;

vii. The location of all proposed developments within the area;

viii. The proposed location of each water system and the principal components described in subsection (B)(5)(n); and

ix. The location of all parcels for which a copy of a request for service has been submitted per subsection (B)(5)(t);

v. A copy of each notice to be sent, as required under subsection (B)(4), to a municipal manager or administrator;

w. A copy of each notice sent, as required under subsection (B)(3), to a landowner not requesting service;

x. For each landowner not requesting service, either the written response received from the landowner or, if no written response was received, a description of the actions taken by the applicant to obtain a written response;

y. A copy of each city, county, or state agency approval required by law to construct the proposed facilities or operate the utility within the proposed service area or extension area or, for any approval not yet obtained, the status of the applicant's application for the approval;

z. The estimated number of customers to be served for each of the first five years of operation, expressed separately for residential, commercial, industrial, and irrigation customers and including documentation to support the estimates;

aa. A description of how wastewater service is to be provided in the proposed service area or extension area and the name of each wastewater service provider for the area, if any;

bb. A letter from each wastewater service provider identified under subsection (B)(5)(aa), confirming the provision of wastewater service for the proposed service area or extension area;

cc. Plans for or a description of water conservation measures to be implemented in the proposed service area or extension area, including, at a minimum:

i. A description of the information about water conservation or water saving measures that the utility will provide to the public and its customers;

ii. A description of how the applicant will work with each wastewater service provider identified under subsection (B)(5)(aa) to encourage water conservation;

iii. A description of the sources of water that will be used to supply parks, recreation areas, golf courses, greenbelts, ornamental lakes, and other aesthetic water features;

iv. A description of any plans for the use of reclaimed water;

v. A description of any plans for the use of recharge facilities;

vi. A description of any plans for the use of surface water; and

vii. A description of any other plans or programs to promote water conservation;

dd. A backflow prevention tariff that complies with Commission standards, if not already on file;

ee. A curtailment tariff that complies with Commission standards, if not already on file;

ff. A copy of a Physical Availability Determination, Analysis of Adequate Water Supply, or Analysis of Assured Water Supply issued by the Arizona Department of Water Resources for the proposed service area or extension area or, if not yet obtained, the status of the application for such approval;

gg. If the applicant is requesting a CC&N extension:

i. A current compliance status report from the Arizona Department of Environmental Quality, dated no more than 30 days before the date the CC&N extension application is filed, for each water system operated by the applicant, as identified by a separate Arizona Department of Environmental Quality Public Water System Identification Number; and

ii. A water use data sheet for the water system being extended by the applicant; and

hh. The notarized signature of the applicant.

6. Upon receiving an application under subsection (B)(5), Utilities Division staff shall review and process the application in accordance with the requirements of R14-2-411.

7. Once Utilities Division staff determines that an application submitted under subsection (B)(5) is administratively complete, the Commission shall, as expeditiously as practicable, schedule a hearing to consider the application.

C. Application for discontinuance or abandonment of utility service

1. A utility shall not discontinue or abandon any service currently in use by the public without first obtaining authority therefor from the Commission.

2. A utility desiring to discontinue or abandon a service shall file with the Commission an application identifying the utility; including data regarding past, present and estimated future customer use of the service; describing any plant or facility that would no longer be in use if the application were approved; and explaining why the utility desires to discontinue or abandon the service.

3. A utility is not required to apply for Commission approval to remove individual facilities where a customer has requested service discontinuance.

D. Application for authority to abandon, sell, lease, transfer, or otherwise dispose of a utility

1. A utility shall not abandon, sell, lease, transfer, or otherwise dispose of its facilities or operation without first obtaining authority therefor from the Commission.

2. A utility desiring to abandon, sell, lease, transfer, or otherwise dispose of its facilities or operation shall file with the Commission an application that includes, at a minimum:

a. The legal name, physical address, mailing address (if different), and telephone number of the utility;

b. A description of the utility property proposed to be abandoned, sold, leased, transferred, or otherwise disposed of;

c. Documentation establishing the utility's financial condition, including at least the utility's current assets and liabilities, an income statement, the utility's revenue and expenses for the most recently completed 12-month accounting period, and the value of the utility's utility plant in service;

d. The legal name, physical address, mailing address (if different), and telephone number of any proposed purchaser, lessee, transferee, or assignee;

e. The terms and conditions of the proposed abandonment, sale, lease, transfer, or assignment and copies of any agreement that has been or will be executed concerning the transaction;

f. A description of the effect that the proposed transaction will have upon the utility's services;

g. The method by which the proposed transaction is to be financed;

h. A description of the effect that the proposed transaction will have upon any other utility;

i. The number of customers to be affected by the proposed transaction; and

j. A description of the effect that the proposed transaction will have upon customers.

E. Additions or extensions of service contiguous to existing CC&N service areas

1. Except in the case of an emergency, a utility that proposes to extend service to a parcel located in a non-certificated area contiguous to its CC&N service area shall notify the Commission before the service extension occurs.

2. Each notification required under subsection (E)(1) shall be in writing, shall be verified, and shall set forth, at a minimum:

a. The legal name, mailing address, and telephone number of the utility;

b. The number of persons to be served in the contiguous parcel;

c. The legal description of the contiguous parcel and the location of the structures to be served therein, in relation to the utility's CC&N service area; and

d. A statement that service will be extended only to a non-certificated parcel contiguous to the utility's CC&N service area.

3. When emergency service is required to be provided to a person in a non-certificated area contiguous to a utility's CC&N service area, the utility shall notify the Commission of the service extension as soon as possible after the service extension occurs by providing written notice that includes the information required under subsection (E)(2) and describes the nature and extent of the emergency.

Ariz. Admin. Code § R14-2-402

Adopted effective March 2, 1982 (Supp. 82-2). Amended by adding subsection (C) effective September 28, 1982 (Supp. 82-5). Amended by final rulemaking at 15 A.A.R. 2066, effective January 22, 2010 (Supp. 09-4).