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Tag: EPCOR

Water Infrastructure Finance Authority OKs 2 projects to increase AZ water supply

Key Points:
  • WIFA approves at least two desalination plants in California or Mexico
  • Other proposals include treating wastewater and capturing storm water
  • New water would not be available until early to mid-2030s

Arizona will provide taxpayer money to help private companies develop plans for at least two and possibly three desalination plants in California or Mexico under proposals approved by a state agency’s board on Nov. 19.

The Water Infrastructure Finance Authority board also approved initial development of several other projects from the two applicants that proposed new Arizona water supplies and had passed a lengthy review process. Those proposals would rely on treating wastewater, capturing storm water and storing it underground or making agricultural irrigation more efficient, with the projects located in California, Colorado, Utah or Mexico.

Both the desalination plants and the remaining projects envision trading that new water for Colorado River allocations currently used by those states or Mexico. 

The amount of money the state will pay the companies involved to develop their proposals further isn’t known. Instead, the state agency will issue “task orders” in the coming months and determine how much it will pay for each project to be fleshed out.

And the water won’t come quickly: The earliest a proposal could supply any new water is in 2028, but most aim for the early to mid-2030s to begin deliveries.

No cost estimates for the projects were immediately released, but previous desalination proposals were expected to cost between $5 billion and $10 billion each to develop. 

All told, Arizona’s water supplies could be boosted by between 427,000 acre feet and 1.6 million acre feet a year if all the projects were implemented. An acre foot is about 326,000 gallons – enough water to cover an acre of land one foot deep and typically enough to supply three homes for a year.

The moves by the agency known as WIFA come as the state faces additional cutbacks in its Colorado River supplies, and as its existing groundwater sources are stressed to the limit. The unanimous vote by the 9-member board and the release of the proposals mark the first time the public has seen any details of the projects proposed to WIFA over the summer and reviewed in secret by agency staff and by a WIFA committee last week.

Chelsea McGuire, WIFA’s executive director, told reporters after the meeting that, three years after the Legislature expanded the agency’s mission to include finding new water, she was excited to reach the point where the agency is acting to secure new supplies.

“These are real projects, this is no longer a hypothetical,” McGuire said. “This is no longer something that someone is dreaming of in a room somewhere.”

Not considered by the board at the latest meeting was a proposal by water provider EPCOR to import water from a controversial project in the southeastern California desert under development for decades by a company called Cadiz Inc.

Cadiz owns a large swath of remote desert land about 60 miles west of Parker, Arizona. The company has worked for more than three decades to tap a large and ancient underground aquifer as a water source for thirsty California cities but has faced fervent opposition from conservation groups and state political leaders.

Environmental groups turned out in force at the Nov. 19 meeting to urge the WIFA board not to approve the Cadiz project, only to learn that a board committee that reviewed the projects in secret last week had recommended against approval.

“That one’s over, we’re not doing that,” board member David Becham said.

What remained were three other projects proposed by EPCOR, which provides water in multiple areas of the state, including San Tan Valley, Sun City and Paradise Valley, and four by a group led by a Spanish company.

EPCOR is proposing a desalination plant in Baja California that would produce between 167,000 and 500,000 acre feet of water per year by 2034.

The water would be delivered by pipeline to the Colorado River at the U.S.-Mexico border and allowed to flow into Mexico. In return, Arizona would get to take that amount of water out of the river farther north and send it to the Phoenix and Tucson areas through the Central Arizona Project canal.

The other desalination proposals approved for funding on Nov. 19 are from the ACCIONA-Fengate Water Augmentation Alliance.

Acciona develops plants worldwide, and Fengate Capital specializes in infrastructure investment. Acciona won a contract last December to design and build a desalination plant in Dana Point, Calif.

The partnership actually made two desalination plant proposals, according to one-page project outlines provided by WIFA 

Under the first, it would build a new plant in Baja California that would supply 150,000 acre feet of water a year by 2034. The water would be delivered through existing Colorado River water delivery systems or directly exchanged with Mexico for its river allocations.

The second desalination proposal is more general, with the Acciona alliance proposing to use “new or existing” plants in California or Mexico to deliver between 50,000 and 200,000 acre feet of water per year by 2031. That water would be swapped for part of Mexico’s Colorado River supply.

Both EPCOR and the Acciona group applied for state money to create new supplies in other ways.

EPCOR wants to invest in and develop projects in California.

It envisions capturing excess runoff in California’s Sacramento-San Joaquin Delta and other sources and storing it underground for later use. In exchange for that 10,000 to 100,000 acre feet of water per year, Arizona would get part of that state’s Colorado River supply. 

It also proposes adding a new plant to further treat wastewater from an existing sewage treatment plant near San Diego to drinking water quality in exchange for part of that region’s Colorado River supply. It hopes to net between 14,000 and 95,000 acre feet of new water. 

The Acciona group has a similar “toilet to tap” proposal, hoping to treat wastewater in Mexico and Colorado to high quality, freeing up between 20,000 and 130,000 acre feet of Colorado River water those areas would normally use.

Acciona also wants to invest in improving the efficiency of irrigation operations in Mexico, California and Utah in hopes of obtaining between 16,000 and 466,000 acre feet of water from those areas between 2028 and 2037. 

Ted Cooke, a board member who led the WIFA’s board committee that evaluated the projects, said finding and developing new water supplies for Arizona required a private public partnership the board is now embarking upon.

“We need private equity to get this done,” he said.

“We need private expertise to get this done,” Cooke said while explaining one of his votes. “WIFA cannot operate a plant, WIFA cannot build a plant, WIFA cannot finance this on our own.”

Water Infrastructure Finance Authority to consider five proposals to shore up Arizona’s water supply

Key Points: 
  • Arizona’s water supplies have dwindled due to cuts in Colorado River supplies
  • Arizona’s Water Infrastructure Finance Authority may approve five imported water proposals this week
  • EPCOR’s proposal relies on a controversial pumping project in California’s remote southeastern desert

The board overseeing the state agency charged with finding new water supplies for Arizona is poised to approve as many as five water importation proposals, one of which could reignite decades of interstate controversy. 

A conservation group and an Indian tribe warned the Water Infrastructure Finance Authority committee screening the projects that EPCOR’s apparent proposal is fraught with risk and can’t deliver the stable water supply Arizona needs.

Details of the five projects — two involving desalination plants and the others relying on wastewater treatment, surface water and an unidentified third source — remain secret until the full board of the agency known as WIFA meets Wednesday.

But the Fort Mojave Indian Tribe and the National Parks Conservation Association say it’s pretty clear EPCOR plans to rely on a controversial pumping project in the remote southeastern California desert — an area protected by environmentalists for decades.

And the conservation group believes EPCOR and the developer of the California desert project, Cadiz Inc. are relying on the ignorance of officials here about the Arizona project, which has faced vociferous opposition in California, to get some of the nearly $400 million in Arizona tax dollars that WIFA has to give away to develop plans to import water.

Canadian water provider EPCOR, which operates municipal water systems in several Arizona communities, most notably in the San Tan Valley on the southeastern edge of metro Phoenix, signed a memorandum of understanding with Cadiz on Aug. 1.

WIFA has not publicized any importation planned deemed controversial. And EPCOR, owned by the city of Edmonton in the Canadian province of Alberta, has made no public announcement of the deal to import the water into Arizona.

But the reason there are details on this plan is that Cadiz is a publicly traded company. And that enabled Capitol Media Services to access a notice it had to file with securities regulators about its memorandum of understanding with EPCOR.

The deal, if finalized, gives EPCOR exclusive rights to market 25,000 acre feet of water to Arizona annually from a project located in a remote section of the California desert, about 60 miles west of Parker. It also requires it to finance and build a section of pipeline to deliver the water.

The Cadiz project, which it has named the Mojave Groundwater Bank, relies on ancient groundwater located under an expansive desert valley. Cadiz plans to pump 50,000 acre feet per year for 50 years from the project and has tried for decades to obtain the necessary approvals to sell water to Southern California water providers.

An acre foot is about 326,000 gallons — enough water to cover an acre of land one foot deep and typically enough to supply three homes for a year.

Cadiz says its goal is to “sustainably deliver clean, affordable water to people who need it.” But the company’s proposal has been fought for 30 years by California politicians, conservation and environmental groups and federal agencies — at least when Democrats controlled them. So far, it has not delivered any water.

The project has passed a series of environmental reviews, but in 2019, California passed a law requiring a state agency to add another layer of approvals.

Because its pipelines would cross federal land, it also needs federal agency approval.

The first Trump Administration greenlit the proposal, but a federal judge blocked its approval of a pipeline across federal lands. The Biden Administration then pulled the federal approvals, but the company this year signed an agreement with the Department of the Interior to support development of its groundwater bank. 

The tribe and conservation groups say the pumping will imperil springs that provide the only water within 1,000 square miles and nourish wildlife, including bighorn sheep. And they say that once the water is gone, the vast desert region won’t be able to support people, either.

Neal Desai, the regional director for the National Parks Conservation Association, testified to the WIFA board panel last week. He said in an interview that his group and the tribe are trying to ensure WIFA is aware of the controversial background of the pumping proposal, including opposition from California politicians like Gov. Gavin Newsom and its two U.S. senators.

“It’s been around for 40 years, and it doesn’t have a shovel in the ground because it would be a complete disaster,” Desai said about the Cadiz proposal.

“And so it seems like now they’re trying to find someone that might not know much about their project and target Arizona and see if they can get resources, because they’re striking out politically in California,” he said. “We’re just letting (WIFA) know that this is a very toxic issue that stands no chance of moving forward and only is going to bring them into a controversy … (it) will not help Arizona at all.”

An EPCOR spokesperson said the company couldn’t comment on the proposal because it’s in the early stages, but provided a statement saying that, as Arizona’s water supplies dwindle, it is focused on “sustainable solutions that preserve and expand water resources.”

“We explore many possibilities but only speak about a project once an agreement is in place and the project is ready to move out of the exploratory phase,” the statement said. “Until then, we cannot speak to any proposed project details, aside from noting that we carefully evaluate each opportunity and that balancing environmental stewardship with community benefit is central to our process.”

Cuts to Arizona’s Colorado River supplies in recent years have forced the state to expand its search for new water and for housing developers to seek out innovative ways to secure more water. Earlier this year, the state approved two Phoenix-area municipalities tapping a desert aquifer about 40 miles west of Phoenix.

Cadiz didn’t respond to an email seeking comment on its deal with EPCOR, which it revealed in a Securities and Exchange Commission filing. 

In addition to the EPCOR purchase deal, the company is ramping up its financing, announcing earlier this month a $51 million loan from a small California tribe to fund its groundwater banking investments and an additional $400 million commitment by private investors for the project. It also previously bought 180 miles of pipe originally intended for the canceled Keystone XL pipeline to use in its water delivery systems, touting the purchase as a way to avoid new Trump Administration tariffs. It previously bought 220 miles of the abandoned El Paso Natural Gas pipeline to convert for water delivery.

Of the five proposals considered by the WIFA board committee in executive session last week, four were from EPCOR. In addition to the apparent California groundwater proposal, it also proposed a desalination plant, wastewater treatment to produce drinkable water, and new surface water sources. 

Another desalination proposal under consideration is from the ACCIONA-Fengate Water Augmentation Alliance. 

Acciona is a Spanish firm that develops plants worldwide. Fengate Capital is a private equity firm specializing in infrastructure investments.

Acciona and a construction firm won a contract last December to design and build a desalination plant in Carlsbad, CA. It already runs plants in Saudi Arabia, Australia and Florida, among others. 

The proposals and presentations to WIFA’s Long Term Augmentation Committee by proponents were conducted in executive session, with no public or press observers, and the board cited state procurement rules requiring secrecy. The committee recommended projects to get taxpayer money, and four of the five are on Wednesday’s board agenda, including the EPCOR project that appears to involve Cadiz.

Wednesday’s meeting of the full board will finally see details of the proposals made public and decisions on which if any to fund made in a public meeting.

The WIFA committee initially received a third desalination plant proposal from an Israeli attorney who sought a deal for a new plant with WIFA shortly after the agency’s mission was expanded in 2022 to include finding new water sources. 

But in a surprising twist, the proposal by Erez Hoter-Ishay and the company he heads, ZARETAW LLC, didn’t pass muster with WIFA’s procurement officer and was not considered by the board committee last week.

Erez Hoter-Ishay, in 2022, brought an unsolicited proposal for a desalination plant on the Sea of Cortez to be built by an Israeli company, IDE Technologies to the WIFA board. It came just months after then-Gov. Doug Ducey and the Legislature approved the 2022 law expanding WIFA’s mission and promised to give WIFA $1 billion to fund new projects. 

The Legislature never came through with all that money, leaving WIFA with only about $375 million – and a quarter of it must be spent on in-state projects. 

Hoter-Ishay’s unsolicited proposal prompted questions from some lawmakers about backroom dealings. That’s because Ducey had visited Israel numerous times during his eight years as governor with an eye on new water technologies and called for the state to build a desalination plant in his 2022 state of the state address.

Hoter-Ishay was at the time working for IDE, an Israeli firm that has developed desalination plants since the 1960s in Israel, China, the U.S. and other countries, and runs plants in several countries. 

Hoter-Ishay’s latest proposal was rejected by WIFA’s procurement officer because it failed to include required details in multiple areas. They include failing to identify a construction manager or lead contractor, failing to identify its investors, even though it said IDE Water Assets Ltd. was an equity partner, and failing to provide any financial statements or proof that it could obtain insurance.

Hoter-Ishay didn’t respond to requests for comment, nor did IDE Technologies.

The WIFA committee that reviewed the proposals conducted its deliberations since receiving the proposals in August in secret under state procurement rules. But that will now change.

“The board meeting coming up on the 19th will be very revealing,” Chelsea McGuire, WIFA’s executive director, said. “Obviously, we will know the results of these discussions in ways that I think the public and definitely our board are very anxious to see.”

She said the confidentiality of the procurement process will end at Wednesday’s meeting, with the public not only invited but encouraged to participate and provide comments on the proposals.

“Thanks for your patience as we do a little bit more in this procurement process, and then open it up to the process we’re all really excited for, which is the public sausage making,” she said.

State issues assured water supply designation amid ongoing lawsuits

Key Points:
  • EPCOR Utilities is the first recipient of an alternative designation of assured water supply
  • The designation was granted under new water rules adopted last year
  • ADWR is currently fighting two lawsuits against the rules

Gov. Katie Hobbs announced the first recipient of an alternative designation of assured water supply amid ongoing lawsuits against the Arizona Department of Water Resources. 

EPCOR Utilities is the first entity to receive a designation under the Alternative Designation of a 100-Year Assured Water Supply rules adopted by ADWR last year. The designation will allow residential construction to begin in parts of the West Valley after a two-year moratorium.

“This ADAWS Designation is going to save water, it is going to support sustainable economic growth, and it is going to create more housing,” Hobbs said in a statement. “Today we are again demonstrating that Arizona can, and will, continue to grow our economy while protecting our water.

In June 2023, Hobbs restricted the approval of new assured water supply certifications in the Phoenix Active Management Area due to a shortage of groundwater. The Alternative Designation of a 100-Year Assured Water Supply was approved in October 2024, allowing developers to explore new water sources and offset groundwater pumping in order to build in the area.

Under the ADAWS, new developments cannot obtain a certificate of 100-year assured water supply unless they can demonstrate that supply across the water provider’s entire service area, not just the development site. ADWR Director Tom Buschatzke celebrated the first designation under ADAWS in a statement released Oct. 7.

“I commend Governor Hobbs for her leadership in this effort, and I further commend my hard-working staff for the countless hours they have contributed to making this alternative pathway to an Assured Water Supply a reality for participating providers,” Buschatzke said. “The many stakeholders involved in this process have been intensely engaged and determined to find that next adaptation of water policy that allows incremental, sustainable growth while protecting groundwater. I heartily commend them as well.”

Hobbs’ announcement comes as ADWR fights two separate lawsuits from the Home Builders Association of Central Arizona (HBACA), one of which was joined by Senate President Warren Petersen and House Speaker Steve Montenegro. The first lawsuit alleges ADWR did not have the authority to create the ADAWS, and the second challenges the concept of an assured water supply altogether. 

The second suit, filed by the Goldwater Institute on behalf of HBACA, challenges the groundwater modeling requirements used for the 100-Year Assured Water Supply Program, which was created by the Groundwater Management Act in 1980. 

In a press release issued after the first lawsuit was filed in March, Republican leaders described ADWR as a “rogue” agency and characterized the groundwater pumping requirements as a tax.

“This is government overreach at its worst,” Montenegro said in a statement in March. “The people of Arizona elected us to defend their interests, not allow unelected bureaucrats to impose illegal taxes that make the American Dream of homeownership out of reach.”

Petersen repeated that characterization in a statement to the Arizona Capitol Times on Oct. 7.

“The Governor has unilaterally charged a 33.3% water tax, without legislative consent — and this new tax ultimately will be paid by Arizona families,” Petersen said. “This is exactly the abusive taxation that the Senate sued to stop, and it illustrates why taxpayers cannot trust Katie Hobbs with their checkbooks.”

Republican lawmakers have been frustrated with ADWR since late last year for using a rulemaking process to create the ADAWS without specific legislation directing it to do so. Legislators also expressed frustration with the Governor’s Regulatory Review Council, the agency responsible for reviewing and approving state agency rules, for giving the ADAWS the greenlight in 2024. 

Hobbs’ office and ADWR have disputed the characterization of the requirements as a tax and have defended the ADAWS as a way to preserve water supplies and continue home building in areas of the Valley that are dependent on groundwater.

Attorneys for ADWR filed motions to dismiss both lawsuits. An oral argument in the case filed by legislative leaders and HBACA is scheduled for Nov. 19, while the lawsuit filed by the Goldwater Institute on behalf of HBACA is currently awaiting a ruling from the Maricopa County Superior Court. 

Building water resilience through innovation and partnerships

Arizona stands at a pivotal moment. The Colorado River – long central to our state’s growth and prosperity – is shrinking under the strain of drought and rising demand. The challenges are real, but so are the opportunities. For decades, Arizona has led the nation in confronting water scarcity with foresight and resolve, from pioneering conservation strategies to forging multi-state agreements. That tradition of leadership matters now more than ever.

As we prepare for a future with less water, the path forward must be built on smart solutions, strategic partnerships and regional collaboration. At EPCOR, we’re committed to that work. Serving diverse regions and drawing from multiple sources gives us a clear view of Arizona’s water challenges and the responsibility to act. Our lowest hanging fruit is addressing aging infrastructure and making investments that conserve water, support growth and create greater efficiencies across our water and wastewater systems. Now, as pressures mount, innovation plays a critical role in shaping our next chapter. 

One area that innovation is making a measurable difference is leak detection. Through smart meters, we’re helping customers identify leaks early – saving water and reducing costs. And, through our partnership with FIDO Tech, we’re using AI and acoustic sensors to detect underground leaks. In fast-growing communities like San Tan, this technology has helped us rapidly find and repair over 115 million gallons of leaks annually that might have gone unnoticed for years.

We’re also advancing solutions through strategic partnerships. EPCOR recently collaborated with several startups through the Arizona Commerce Authority and Plug and Play’s sustainability cohort. One promising pilot effort is through OXbyEL, a local company developing a low-cost method to remove PFAS. Their system doesn’t just trap the contaminant – it breaks it down at the molecular level. Though early-stage, this kind of forward-thinking work shows how utilities can accelerate technology to protect public health. 

Looking ahead, we’re also exploring predictive maintenance and advanced decision-support systems that help us make faster, smarter decisions and keep our systems more resilient. Across Arizona, our industry is advancing supply and efficiency, from expanded reuse to regional water development projects. While EPCOR isn’t involved in every initiative, we’re proud to be part of the broader movement – from our innovative facilities where we reuse or recharge 96% of the wastewater we treat to our expansive conveyance systems that move water from where it’s abundant to where it’s needed. 

Arizona has always led in water supply planning and management. The next chapter of Arizona’s water story is being written by all of us – utilities, industry and communities working together to secure our water future. Through smart planning, bold solutions and a united approach, Arizona will continue to lead as other states follow.

Shawn Bradford is senior vice president of EPCOR USA. 

Canada’s EPCOR promises a decade of investment in Arizona’s water infrastructure

When EPCOR moved to Arizona in 2011, company officials saw a unique opportunity to expand its footprint despite the state’s complicated water challenges, sustained drought conditions and growing population.

Since 2011, EPCOR has invested more than $2.8 million in infrastructure improvements, including building and upgrading wastewater facilities, expanding its meter connections to serve growing areas of the Valley, and partnering with other Valley cities to serve customers and share facilities in areas stretching from the Loop 303 corridor in the West Valley to San Tan Valley.

In November, the utility company moved its more than 31,000-square-foot U.S. headquarters to a new office in Glendale. Over the next decade, the company plans to invest another $1 billion.

The Canadian-based company, which also has a presence in New Mexico and Texas, acquired Chaparral Water Company when it first moved to the state, followed by the acquisitions of Arizona American Water Company and New Mexico American Water Company in 2012.

It has since expanded its reach to the area around Luke Air Force Base and has set more than 100,000 new meter connections in the West Valley to accommodate the area’s growth since 2012. In addition, the company serves a number of other areas including Buckeye, Sun City and Anthem.

“That was just all the organic growth — all that population boom that the West Valley has experienced in the last…dozen years — we’ve captured a large portion of that,” Shawn Bradford, Senior Vice President of Regulated US Water, EPCOR’s U.S. branch, said.

In 2021, EPCOR purchased Johnson Utilities in the San Tan Valley area after the water and sewer company struggled with wastewater treatment issues, overflows and other challenges. EPCOR subsequently invested $259 million in the San Tan Water & Wastewater Districts for facility improvements and built the Copper Basin Water Reclamation Facility, which increased wastewater capacity and ended a moratorium on home building in the area.

“Once the wastewater treatment plant was up and running, they were able to lift that limitation and allow San Tan to grow as demand sees fit,” Bradford said.

EPCOR has also committed to building a standpipe to provide water service for residents in the Rio Ver​de Foo​thills outside Scottsdale and trading service territories with Queen Creek to move customers closer to each utility’s infrastructure.

Queen Creek has also collaborated with EPCOR to treat wastewater, and will look to work with the company on future capital projects such as a water treatment plan where both utilities have ownership and can treat their own supplies, said Paul Gardner, water resource director for the Town of Queen Creek.

“We’re so close together and there’s so many opportunities,” Gardner said. 

These types of partnerships are financially feasible and can save the companies and customers money, he said.

“It ends up saving…rate payers in both communities, where you can have two or three entities going together to build these facilities,” he said. “And as much as pricing has gone up and how costly everything is, this really is a win for the rate payer, no matter what community they live in.”

EPCOR will continue to face challenges, including continuing to upgrade its infrastructure, especially given the increased costs of building water treatment plants.

Still, Bradford is confident that the company can handle the task.

“We think we’re uniquely qualified to solve difficult water challenges, complex water problems, and when you’ve got sustained drought in a booming economy and a booming population base, there’s a challenge…managing your water resources,” he said. 

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Simple solution to Rio Verde Foothills water issue 

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