BULLHEAD CITY — Al Scigliano wants to get the Arizona Corporation Commission involved in the debate on the fair market value of EPCOR Water Arizona’s Bullhead City holdings — or at least to level the playing field for that ongoing debate.

Scigliano on Thursday sent a letter to Commissioner Sandra Kennedy asking that the ACC order EPCOR to “cease and desist” making what he terms “false or misleading” statements about the value of its water system.

“They’re telling the public one thing after they told the ACC something different,” Scigliano said Friday, explaining what motivated him to send the letter to Kennedy.

The fair market value of EPCOR’s Bullhead City holdings is at the center of Proposition 415, the referendum asking Bullhead City voters for authorization for the city to pursue acquisition of EPCOR’s local water system. Proposition 415 was the city’s response to ongoing rate requests by EPCOR to the ACC that already have significantly increased monthly water bills for residents and businesses.

Scigliano, who helped organize the H2O committee that is trying to create support for Proposition 415, said he was asking as a concerned resident, not a committee member, for the ACC to order EPCOR to stop making statements about the value that he said the company cannot prove.

EPCOR has said the local water system has a value of $130 million and has used that figure repeatedly in attempts to convince voters that Proposition 415 would be too expensive for the city. The city, relying on figures from a private consulting group, came up with a market range of $42 million to nearly $71 million, settling on a figure of $55 million.

EPCOR officials have said that $55 million figure is too low, noting that in the language of the referendum, the city is asking for approval to issue bonds up to $130 million. The city has countered that the referendum wording was a “worst case” scenario, if the EPCOR system indeed was deemed by a court to be worth $130 million. City officials have said they are confident the figure will be much lower.

While the two sides have consistently and frequently tossed out numbers, it likely will be up to a court to decide the value if Proposition 415 passes. A negotiated settlement is unlikley; EPCOR officials have been emphatic that the company’s local holdings aren’t for sale.

Scigliano, in his letter to Kennedy, said EPCOR is “making false statements regarding the value of their Mohave and North Mohave districts that are two to three times greater than the value stated by EPCOR in their rate application. ...

“They are making these false statements specifically to confuse the voters in Bullhead City in order to defeat” Proposition 415.

“As EPCOR is a regulated utility, they should not be making false and misleading statements to the public and I am requesting that you order them to immediately cease and desist making such statements and order EPCOR Water Arizona to issue a public statement stating the correct value of the Mohave and North Mohave Districts as described (in the 2017 rate request).”

Scigliano said that EPCOR, in that 2017 filing and in subsequent matters related to it, listed a “fair value rate base” of about $34 million for its Mohave district and $4.7 million for its North Mohave district, the two districts targeted in Proposition 415. In a Replacement Cost New rate base, the values were placed at $40 million and $5 million respectively. And in net utility plant in service accounting, EPCOR submitted numbers of $56 million and $9.7 million.

“None of those add up to anywhere close to $130 million,” Scigliano said Friday.

Fair market value generally is a price at which a willing seller and a willing buyer would agree to a transaction. The fact that EPCOR is not a willing seller has little or no bearing on a court’s decision of value should the Proposition 415 pass and the city enact eminent domain proceedings to acquire the utility.

(2) comments


Thank you Mr. Scigliano for stating the true valuations of Epcor’s Mohave and

N. Mohave districts. The replacement cost new rate base is $45 million total for the two districts in BHC. Epcor’s $130 million is an exaggerated valuation to scare voters. Epcor can’t prove their inflated valuation in a court of law, however, BHC can prove the $45 million valuation, because that’s what the Arizona Corporation Commission has accepted. BHC has a AA bond rating and can currently borrow monies with bonds at 2.5% -3.0% interest rates. That’s reality.

Tom Hixson

Bullhead City

Fort Mohave Resident

What a joke from the H20 committee. Al is an has been.

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